USOIL (45 Min)Given the tensions in the Persian Gulf region and today's meeting of OPEC members, there is a likely price moderation.
We are in the bear array
And we evaluate support areas in of 55.5 to 56.
(Today watch list)
Opec
G-20 meeting, OPEC meeting & rubleThe last week was not that calm. The Fed on Wednesday it clear that they are ready to reduce the interest rate. Some of the analysts are predicting the dollar falls in the near future by 5 - 10 %. So, we are looking for dollar selling points this week.
On Friday the ruble buyers experienced an unpleasant moment when the ruble literary has collapsed and lost 1 % of its value. The reason is that US lawmakers are proposing to impose sanctions against the public debt of the Russian Federation in response to Russia's intervention in the elections. Recall, we recommend to sell the ruble and the current price looks extremely attractive. As for the new sanctions, for now, this is just talking, but the reaction the ruble reaction shows that it is vulnerable even to simple rumors.
Boris Johnson and Jeremy Hunt are confirmed as the final two. Boris Johnson has led the voting so far, achieving more votes each time. A winner will be picked up in a month's time. And in the meantime, the candidates are In the process of rolling out their campaigns.
The upcoming week is unlikely to be an easy one. The important macroeconomic statistics will be published (US GDP data also), two important events for financial markets will take place this week. This is the OPEC meeting, where the fate of OPEC + №2 should be decided. Accordingly, the oil market could get a boost for several months. And, of course, the G-20 meeting. First of all, we are expecting a signal about the end of the trade war. By the way, if such a signal appears, we strongly recommend paying attention to gold, which gets very high and is clearly ready to fall down.
Our trading preferences for the week have changed: we will continue to look for points for selling the US dollar against the Japanese yen, the euro and the pound. But with gold purchases in the week, we slow down, at least, aggressive ones. We expect a correction in gold and prepare for its sale. The oil trade is paused, for the time being - until OPEC meeting result announcement. The ruble sales not only did not lose its relevance but also became the most attractive.
Where is Brent oil heading next?As we get closer to the date of OPEC meeting this month, June 25th, Brent again is quite to be volatile and based on the status quo of the world right now, nothing is certain anymore as the trade wars may drag on into 2020 and even further in the future. All of us can read on the news that supply is surplus and demand is kinda low at the moment. Would it be enough to drag Brent oil down to below $55 or even below $50. Also, Russian Energy Minister Novak has said he couldn't rule out a scenario in which oil could fall to $30 if the global oil deal wasn't extended. But from now until June 25, I think even if Brent drops to $55, OPEC will agree to extend their deal in order to help the market. Just remember, don't be too hopeful.
Caught a falling knife (update)Everyday around this time, OANDA:WTICOUSD makes a move and some volume comes in.
I caught todays move on the hourly divergence.
Fair price for Bitcoin, the pound - worst week, artificial oilJPMorgan Chase & Co analysts in connection with the rapid growth of the cryptocurrency market in recent times, and Bitcoin in particular, have thought about the question “what is its fair price?”, so-called intrinsic value. Determining the fundamental cost of cryptocurrency is a very difficult and highly ambiguous question, but considering Bitcoin as a commodity asset, you can simply calculate the amount of the cost of "its production" (electricity, the computing power of computers, equipment depreciation, etc.).
So, according to their calculations, the current price sharply exceeded the “cost price” of Bitcoin. This last happened in 2017. We know the result. Recall, any increase in cryptocurrency should be used for their sales – that is our position.
The pound remains under pressure. Actually, previous week was the worst for the pound since 2017. There was little chance that the Government will accept the deal. And the chair Theresa May is sitting on wobbling quite a lot. According to the polls, the most likely candidate is Boris Johnson. Property prices in the UK are continuing to decline, reflecting the concerns of investors and consumers about the results of Brexit. Given that there is no domestic political unity in the UK, the chances for a positive outcome in the near future are not visible. This means that the pound will continue to be under pressure. Like real estate prices in the country.
Oil price is growing. The reasons are the same - tensions in the Middle East and the potential threat of war with Iran. Despite the fact that the current desire of the market is to buy oil, we recommend looking for points for sales on the intraday basis as well as medium-term. Why? - some artificiality of the current market conditions. OPEC + has limited the offer, but this process is unnatural and at any time in the market may appear 1.2 million b / d above. The current position of Russia, that proposes not to rush to the issue of extending OPEC + after June is playing in its favor. At the same time forecasts for oil demand have become increasingly gloomy lately.
Important macroeconomic statistics will not be published today, so the events will probably continue to evolve in line with current trends.
Our trading positions for today are as follows: we will look for points for buying the euro against the US dollar. Points for selling oil and the Russian ruble and points for buying gold and the Japanese yen.
Prospects for peace in trade wars, Japan’s GDP, OPEC+ and BrexitThe previous week has been having a hard time fundamentally duo to Sino-U.S. trade war. China does not intend to a resumption of negotiation still Washington is continuous to speak from a position of strength and power. Therefore the “happy end” was very close but suddenly became subtle. Investors have been hoped for restarting the dialogue and rising in seeking compromise, but on Friday it became clear that it is not something should be counted on. According to the Chinese state media, the country sees no reason for the resumption of the negotiation process. Thus, all hope for a meeting of the heads of China and the United States in the framework of the G-20 summit at the end of June. That is, another month and a half should not count on stress-reduction.
From the perspective of such news, we have become even more confident about our position to buy safe-haven assets (Japanese yen and gold). Accordingly, we are planning to look for points for buying safe-haven assets (Japanese yen and gold) on the intraday basis. As for the yen, today's data on Japan's GDP is additional and a strong argument in favor of buying the Japanese currency. GDP growth in the first quarter significantly exceeded analysts' expectations.
Everything is still bad with the pound, that ended the week with the strongest decline in the last few years. Markets are selling duo to another Parliament vote failure in Britain. Prime Minister Theresa May is under pressure by not only her opponents but also members of her own party. We are talking about her resignation from the post of a leader according to the results of the fourth vote in Parliament. And the results for the current scenario are predictable - a vote “against” the May plan. Despite the extremely attractive points for pound buying, we continue to wait for a fundamental reason for their start.
The results of the previous week appeared pretty successful for oil. But we are still full of pessimism. On the one hand, the trade war is a very negative signal for oil demand, and therefore for a possible increase in asset prices. In addition, we are skeptical about the future of OPEC +. That is, from the supply side in the near future there is a very serious threat. Total, this week we will continue to look for opportunities to sell the asset. But do not tend to get carried away and each intraday position has to be limited with fairly rigid stops. The fact is that the OPEC + meeting held this weekend somehow reassured investors who were nervous. OPEC + participants expressed readiness to comply with the agreement until the end of 2019. And yes, the number of active rigs in the United States has fallen to a minimum over the last 13 months. There are enough bullish signals for oil, especially considering very serious tensions and problem situations in Iran, Venezuela and Libya.
As for our preferences for this week in general and Monday in particular, they are as follows: we will look for points for buying the euro against the US dollar, selling oil and the Russian ruble, as well as buying gold and the Japanese yen. Considering how uneasy the financial markets are, we will limit our positions with fairly shortstops, especially since some of the deals are definitely at odds with the current mood on the markets.
Weak data from the USA, oil in danger and pound under pressureYesterday’s data on US retail sales could be described as weak only. Sales dropped 0.2% in April (with growth forecast at 0.2%) therefore the dollar has suffered sales.
We recommended looking for points for selling the dollar yesterday because the afore-mentioned scenario was considered as fundamental one. Our position is unchanged – we short the dollar. First of all against the euro and the Japanese yen. Perhaps the Canadian dollar could be added. Inflation data came out.
The reason to hope for less aggressive rhetoric from the Central Bank of Canada has been given by inflation data on Canada.
Another data that came out yesterday was the statistics from China. The figures also frankly did not please: industrial production, retail sales and investment growth rates - all indicators appeared much worse than expected. That only assured investors that the world economy will slow down further, and the trade war is - a real evil.
Meanwhile, the pound continues to be under pressure. The basic reason is the same - Brexit. The government is not able to get on well with Labor. This means that the vote on the updated Brexit plan, scheduled in the House of Commons for the first week of June, may fail once again. Our position is to refrain from buying the pound. By “goodbye” we mean the appearance of clarity in Brexit situation. Given that the potential of pound growth is measured in hundreds of points, it is better to receive less than 100-150 pounds of profit but to enter consciously and surely.
Meanwhile, tectonic shifts are possible in the oil market in the near future. The point is that OPEC + is coming to an end. And the decision to extend it is still far from being made. This weekend will be held negotiations of OPEC +. According to rumors, Russia is ready to support the increase in oil production. Given that Saudi Arabia, in general, has similar desires, there is a reason to think that OPEC + will cease to exist, or at least, the size of production cuts will be revised to a significant decrease.
For oil, this means one thing - a reason for a medium-term downtrend formation. So we recommend starting selling oil now, while it costs so much.
Our trading plan for today: we will look for points for buying the euro and the Canadian dollar against the US dollar, sale oil, and the Russian ruble, buy gold and the Japanese yen.
The Bank of England, the problems of the ruble & NFPThe Bank of England left the monetary policy parameters unchanged as we expected. Since this decision was included in the price, all the attention of traders was focused on the comments of the Central Bank and its head. The Bank of England raised its economic growth forecast (up to 1.5% of GDP growth) but warned that the situation with Brexit “darkens” the future for monetary policy. At the same time, the Members of the Monetary Policy Committee of the Bank of England support the view that the Central Bank will require a more stringent policy. However, the markets were not that impressed with such rhetoric of the Central Bank and the pound for the day suffered losses.
Today, all the attention of the markets will be focused on data on the US labor market. In view of the pause in the Fed's actions, it is the figures of the NFP that will shape the market expectations for the future actions of the Central Bank.
Recall, last month the data turned out to be quite good + 196K and the dollar buyers could breathe out with relief after the devastating February data (the NFP was only + 30K). Good numbers are also expected this time - + 180K. This figure fully coincides with the average value of the NFP over the past two years. This means that data will almost certainly differ from forecasts. The question is this number will be worse than predicted or better.
In our opinion, there are reasons to expect an excess with a “+” sign. These thoughts are pushed by numbers from ADP (on Wednesday, the data showed an increase of 275K with a forecast of 180K). The level of correlation between these indicators is low, but they still characterize, by and large, the same thing. In addition, the US GDP figures for the first quarter, albeit with some assumptions, “insist” in a positive way.
So today we will buy a dollar. Another motivation for this is the results of research by analysts JPMorgan Chase, who conducted a retrospective analysis of the dollar behavior over the past 10 years. So, in May, the dollar index grew 8 times. For the American currency, this is the strongest month of the year.
The Russian ruble showed the worst results in the foreign exchange market yesterday. So those of our readers who listen to our recommendations should have earned good money. The reasons for the current sales of the ruble on the surface - the decline in oil prices and fears of new sanctions from the US. As for the deeper, fundamental foundations, we wrote about them earlier in our previous reviews.
About the oil market. Here our readers could earn even more. Russia published data on oil production in April. The country has again failed to meet the conditions of OPEC +. And this is despite the fact that Alexander Novak. Minister of Energy of the Russian Federation, swore an oath that the country would fulfill the terms of the deal. The problem is not in additional volumes of oil that Russia releases to the market (they are insignificant, about 40-50K b / d). But that Russia is not fulfilling the agreement.
If other members of OPEC + start following a similar strategy, then in June the agreement may well not be extended. And this could potentially lead to the appearance on the market of 1.2 million b / d of additional oil supply. That, naturally, will be the strongest blow to the oil quotes. So the current decline is far from the limit. We continue to monitor the situation on the oil market. In the light of such events and market sentiments, today we will also look for points for asset sales.
Oil: The cone! At what price? Some infoHi Guys,
according to IMF Saudi Arabia would need oil at $80-$85 a barrel to balance budget. According to some other economists 2019 budget implies Brent at $70-71 per barrel with oil production at 10.2 million barrels per day. According to Ellen R.Wald Saudi Arabia does not base its oil policy on the budgetary break-even price per barrel of oil.
IMHO forthcoming ARAMCO IPO will play an important role in this respect. Saudi Arabia’s implicit backing for a bond deal crucial to helping finance his ambitions.
In any case, from a structural point of view, price IMHO may be set to remain in "THE CONE" travelling towards apex with a bullish bias supported by shortage supply, political turmoils and disruptions.
For easy reference please note the black bold numbers (1,2,3) are intended to provide the wider narrative.
The comments below refer to the period of consolidation following the low at $25 in 2016. This "bull run" was stopped on Oct.2nd, 2018 by the assassination of Jamal Khashoggi.
Outcome of UN investigations in respect of Human Rights violations alleggedly perpetrated by OPEC major producer may have deep impact on oil price as King under widespread criticism.
U.S. production is another important factor. If WTI holds on to its recent gains and new pipelines come online as scheduled, U.S. supply could also help replace the light-crude oil and compensate exports lost from Iran.
Russia is also looking to increase its production this summer. When OPEC and its non-OPEC partners meet in Vienna at the end of June, it is possible that the production agreement could fall to shambles. In that case, many producers will feel pressure to put as many barrels as they can on the market—a move that will drive prices down. On the other hand, OPEC, with Russia’s assistance, might agree to maintain quotas with only a modest increase in production, and that would keep prices from soaring too high or going too low.
To be continued...
Thank you for your support and for sharing your ideas.
Don't forget to put a like if you appreciate the post and to follow me if you want to receive notifications on new and updated ideas.
Disclaimer:
Please note that I am not a professional trader and these are my personal ideas only. The information contained in this presentation is solely for educational purposes and does not constitute investment advice. The risk of trading in securities markets can be substantial. You should carefully consider if engaging in such activity is suitable to your own financial situation. Cozzamara is not responsible for any liabilities arising from the result of your market involvement or individual trade activities.
Where investors will run to? OPEC +, it’s time to buy euroQuite unclear statistics on personal income and expenses in the United States appeared on Monday. The first one came out worse than expected, and the second - better. In addition, Europe has reported a low level of consumer confidence. Firstly, the euro is very cheap, and secondly, today we are waiting for data on the GDP of the Eurozone and a data block for Germany. Societe Generale recommends analysts to buy EURUSD with targets of 1.16. The reason - hopes for improving the economic situation in the Eurozone.
Nouriel Roubini (American economist, a professor at NYU's Stern School of Business) broke out with apocalyptic predictions about the future recession in the global economy and the early flight of investors into safe assets. Among the possible triggers of global problems, Roubini calls the huge debts accumulated by countries, especially the US, trade wars between the US and China, the bad shape of the Eurozone economy, the political risks of developing countries (Turkey, Venezuela, Iran, Brazil, etc.), as well as unpredictable Trump’s actions on the eve of the 2020 elections in the United States. In this light, we recall our recommendations for buying gold. If investors run, then this is determined by one of their goals.
Meanwhile, OPEC + is trying to stop the start of the correction in the oil market. In particular, Russian President Putin announced the fulfillment of the OPEC + deal, none of the participating countries raised the question of whether to withdraw from the deal as well. Recall the deal expires in June. And its non-renewal is fraught with the appearance on the market of an additional 1.2 million b / d. This will definitely lead to a sharp decline in oil prices. Our position on oil this week is unchanged - we look forward to the start of the correction and recommend selling the asset.
Another reason for reflection was the information that more than one-third of the 80 respondents (managers at Central Banks owning assets of € 7 trillion) made it clear that they are ready to reduce the share of British assets under their personal control (the results of a Central Banking Publications survey). Given that we are talking about tens of billions of pounds that could potentially be spilled onto the market, this news is very negative for pound buyers. However, while there are no facts, it’s obviously premature to panic.
As for our positions, today we are continuing to look for points for selling the dollar against the euro, pound, as well as the Australian and Canadian dollars. In addition, we will buy gold, as well as sell oil and the Russian ruble on the intraday basis.
US GDP growth, Trump called to OPEC and a hard week ahead
Last week was marked by a significant strengthening of the dollar growth. We noted that one of the reasons was the expectation of good data on US GDP last Friday. Preliminary data for the first quarter appeared much higher than analysts' forecasts: + 3.2% y / y, when the forecast was expected as + 2.3%. But the most interesting thing that happened after the publication of this data was that the dollar has undergone a fairly massive sales on all fronts.
In high rates of GDP growth, analysts noted the risk of a future recession in the United States. The fact is that the first quarter growth in 2019, the US GDP is bound to increase stocks and exports. While consumer demand showed a rather weak trend. This was confirmed by the inflationary component of GDP, which grew by only 0.9% after rising by 1.7% in the previous quarter.
In addition, experts are very alerted by such an indicator as final sales of products to national buyers. This figure is falling for the second quarter in a row and shows that the effect of Trump's tax incentives has ended. Thus, the situation with demand in the country is deteriorating. Recall that 2/3 of US GDP is directly or indirectly related to the consumer sector. So, it seems like the dollar buyers shouldn't just be excited. Our position remains unchanged so far - we believe that the dollar is too expensive, and we will continue to look for points for its sales: both in the medium term and on the intraday basis.
Another significant event on Friday was sales in the oil market. The asset literally was covered with the panic wave, which provoked a sharp decline in the cost of oil. The reason was Trump's call to OPEC, in which the President of the United States told the cartel to lower oil prices. We are rather sceptical about the information about Trump's call, but such massive profit-taking out of the blue suggests that the market is ripe for a correction.
Especially when you consider that the number of active oil installations in the United States for the week decreased by 20 units (!) To 805 units, which is the minimum value in 2019 (that confirms the current weakness and vulnerability of bulls). In this regard, this week we decided to roll over into oil sales. And today we will look for points for the sale of an asset within the day.
Talking about the upcoming week, we note that it will be very difficult for trading - too much important information. We want to note Eurozone GDP data that will be published on Tuesday, the Fed's decision on the parameters of monetary policy on Wednesday, the announcement of the results of the Bank of England meeting on Thursday, and statistics on the US labor market will complete a difficult week.
As for our other positions, today we are continuing to look for points for the dollar sales against the euro, pound, as well as the Australian and Canadian dollars. In addition, we will buy gold, as well as sell oil and the Russian ruble on the intraday basis.
WTI Crude Oil - Pressure on Saudi ArabiaHi Guys,
allegations of Human Rights violations are, IMHO, playing an important strategic role for the dynamics of supply and demand and the management of oil price control.
Ellen R Wald wrote the following article published by Investing.com which I found interesting. www.investing.com
At the end of the article Ellen asks the following question:
QUOTE
"What are the short-term and long-term outlooks? There is a variety of scenarios for the oil market. As Iranian oil exports drop, prices will rise. The question, of course, is: how much? This depends on the amount of pressure the United States puts on Saudi Arabia to produce and how much Saudi Arabia resists that pressure".
UNQUOTE
To conclude, IMHO, PRESSURE = allegged Human Rights Violations
Thank you for your support and for sharing your ideas.
Don't forget to put a like if you appreciate the post and to follow me if you want to receive notifications on new and updated ideas.
Disclaimer:
Please note that I am not a professional trader and these are my personal ideas only. The information contained in this presentation is solely for educational purposes and does not constitute investment advice. The risk of trading in securities markets can be substantial. You should carefully consider if engaging in such activity is suitable to your own financial situation. Cozzamara is not responsible for any liabilities arising from the result of your market involvement or individual trade activities.
USOIL Downtrend?Technical perspective
The first wave (24 of Dec 2018- 22 of April 2019 of the correction seems to be over, however, we might revisit 67$ area before going down.
I suspect that we will reach the 60$ area within the next 60 days period.
Structure-wise, the first "leg" (A wave) is opening the possibility for an extending structure, before the downtrend, or the consolidation phase.
Fundamental perspective
Venezuela, Libya, Iran, and Russia are having different problems for exporting at the moment, which support the appreciation of the TVC:USOIL trend.
However, Saudi Arabia (Aramco) has been reducing production in order to support TVC:USOIL prices but has the potential to cover up for the "lost" of production of Venezuela, Libya, Iran, and Russia.
You can follow here on OPEC oil production: www.opec.org
Trade with care,
OPEC cancels April meeting, pushes decision on oil output cutssources:
www.investing.com
www.reuters.com
www.themoscowtimes.com
Further increase in oil is questionableThe relative calm of financial markets on Thursday. Important statistics were not published yesterday. There is nothing expected to change the current situation on Friday. So, it means we continue to work in the previous vein.
While there is a cooling-off period for the main issues of concern, let's talk a little about the future of the oil market.
The International Energy Agency (IEA) drew the attention of oil market participants to the fact that its more than 40% growth in 2019 is entirely due to the supply factors: OPEC +, sanctions against Iran, the problems of Venezuela and Libya - All this contributed to a reduction in supply in the market and higher prices.
So,the IEA experts believe that in the second half of 2019 the market focus may shift from the supply factor to the demand factor. And in this case, the situation does not seem to favor buying oil. Recall the IMF lowered its forecasts for the growth rate of the global economy once again. It means a slowdown in oil demand For the oil market. Sum up the demand may not grow strongly enough to push oil prices up in the future.
Concern about the failure of the second half of 2019 for oil is increasing by statements from OPEC that the cartel may increase oil production after June.
And although the things voiced by the IEA relate to the medium term, it is worth keeping them in mind when making long-term trading decisions. Nevertheless, here and now, trading on the intraday basis is still relevant. But the stops on buying must be set and be made as small as possible.
A possible quick correction in the oil market is a reason not only to think about oil sales but also about the sales of the Russian ruble, which recently has greatly reduced the level of correlation with oil quotations, however, it remains totally dependent on asset prices. Moreover, the current price of the ruble is very favorable for its sales.
Recall that in addition to intraday buying of oil and ruble selling on all time horizons, we are looking for points for intraday buying of gold, as well as sales of the dollar on almost all fronts (with the exception of the Japanese yen).
BRENT CRUDE OIL (UKOIL) (BCO/USD) 4-HOUR TIMEFRAME LONGThe price of brent crude oil (UKOIL) seems to be moving in an uptrend of late. This is because Saudi Arabia decided to take matters into their own hands and cut production, forcing the market to drive prices up (basic economics of supply and demand!). This is also coming at a time when the whole world seems to have forgotten about the bear attack on oil last year and the Kashoggi murder. But let's focus on the now.
In order to enter a short, traders can wait for a retracement to the 68.46, which represents a previous support/resistance level. If you have been living in a cage, then you probably should know that OPEC stands for the Oil and Petroleum Exporting Countries, and they are the cartel controlling crude oil prices and supply. In the centre of this cartel is Saudi Arabia, which is the largest producer of oil worldwide. Muhammad Bin Salman, the crown prince of Saudi Arabia hopes to raise prices of oil for the benefit of his kingdom whilst he comes under constant pressure from westerners like who believe oil should be sold for peanuts in order for them to continue using their dinosaur fuel-guzzling Chevys and Ford trucks without feeling the wallet crunch. Guess who is at the centre of the "oil prices must fall movement"? Yes, you got it right, none other than Donny Trump!
USOIL - Use In Conjunction With USDCAD ArticleAs mentioned in the previous article, I would drop a screenshot of OIL to use in alignment with the USDCAD trade as they strongly correlate with prices per barrel of oil increases, we expect the USD to drop substantially.
As we can see, a pullback seems inevitable however price is still flying to the upside. I will be holding the risk free USDCAD trade through the news to see what it brings us however this is on my watchlist as i intend to catch both the short and long on the USDxxx trades and CADxxx trades.
Due to the timeframe being on the daily, new candles will reflect relatively late however you can monitor price in the top left corner and look at previous price at the time of this screenshot release. Enjoy.
NFP, May asks EU for Brexit delay, and The USA oil productionBureau of Labor Statistics reported employment data on Friday. Data on NFP pleasantly surprised “fans” of the dollar. With market expectations + 177K, in fact, came out + 196K. After the failure of the previous data, the level of fear that the US labor market is experiencing serious problems has subsided. But the mood was spoiled by data on the average hourly wage, which grew by only 0.1% (analysts had expected growth of 0.3%). In general, the data can be interpreted as positive for the dollar, but its growth was moderate. This suggests that its growth potential is limited. In this regard, this week we are looking for points for selling dollar.
We give the current summary of Brexit. Theresa May officially requested the EU to postpone until June 30 in order to negotiate with the opposition and create a version of the agreement for which the Parliament will vote. However, it remains to be seen whether the EU will provide this delay or not. Last month, the EU has already refused to provide it until June 30 and may well “resist”, citing the need for a longer delay. So everything remains unclear and tense. More clarity on the idea will be April 10, when the EU will convene an emergency summit on Brexit. EU leaders will meet April 10 at an emergency summit this will clarify the Brexit situation.
Recall the United Kingdom should either leave the EU without a deal or agree on a new postponement on Friday. The pound is under pressure. We continue to believe in the common sense of both parties and that the UK will not come out with no deal. Therefore, our trading tactics are unchanged - we buy a pound on descent.
Trade negotiations between the US and China are still in progress, and the parties continue to radiate optimism.
A few words about the oil market. Last week we already noted that the data of the US Department of Energy recorded the fact of a new absolute record of oil production in the USA - 12.2 million barrels. So on Friday, data from Baker Hughes was published, which showed that the number of oil rigs in the United States increased by 19 units. Signals are definitely bearish for the oil market. The sharp drop in oil production in Venezuela and the effect of OPEC + No. 2 offset production growth in the United States so far, and events in Libya only add optimism to oil buyers. But the situation, in our opinion, is becoming increasingly dangerous from the point of view of oil prospects. So, we still continue to look for points for buying on the intraday basis, but with a much lower level of aggression at the same time we are beginning to gradually prepare for correction, as well as open medium-term positions for sale. OPEC + No. 2 will soon expire and if it is not renewed, the massacre will begin on the oil market.
The EU will probably be the main news generator. The meeting of the European Central Bank on Wednesday and the EU decision to postpone for
the UK will be the main events of the week. Pay attention to the text of the minutes of the last FOMC Fed meeting, UK GDP and inflation rate for the United States. And once again we remind, April 12 is the current official date of the UK exit from the EU. In general, it will not be boring and volatile, it means there will be a lot of opportunities for earnings.
A full spectrum of views..Here we are dissecting the Daily chart for Oil. From a technical perspective we are completing an ABC correction after an impulsive 5 wave sequence to the downside.
The first level of interest for shorts comes in at 61.14 with the possibility we can extend as high as 64.59. As long as we remain below here the moves will be considered corrective. In other words, a tick above the highs will invalidate the positions.
Whilst the downside remains the main area of interest here it is worth questioning whether the market has retrace far enough already to kickstart these flows..
Best of luck and thanks for all the support in keeping the account moving forward.
Trump is saved, OPEC is at a crossroads, May is in dangerSpecial counsel Robert Mueller announced the results of his two-year investigation of interference in the US presidential elections in 2016, as well as the role of Russia and Trump in it. The results of the investigation might have led to the start of impeachment proceedings against President Donald Trump. But no significant evidence was found against Trump. And this means that the impeachment is canceled (according to the bookmaker PredictIt, the probability of impeachment is about 11%, whereas last week the figures exceeded 20%, and 50% in January).
However, Trump shouldn’t relax at all. Democrats promise to continue to "dig into him" - in the list of potential charges, obstruction of justice, abuse of power, corruption, etc. Despite the fact that this news is more likely a plus to the dollar, we continue to recommend its sales in the foreign exchange market.
As a baseline, we consider a vector change in the Fed’s monetary policy. Fed's Charles Evans said that the Fed may ease monetary policy if the risks of a slowdown in the economy increases. As a result, markets with a 90% probability expect a reduction in rates by December.
Theresa May, the situation is getting more complicated by the minute. Voices about the necessity of her resignation due to Brexit failure is louder and louder. Yesterday, Parliament voted to take control of Brexit. From now on the Parliament will determine the strategy of Brexit. On Wednesday, the most important voting will take place on options for the development of events, which include a second referendum, the decision to stay in the EU, leave the EU without a deal, or cancel Brexit.
The oil market is “confused” and cannot decide whether to grow or fall. On the one hand, Citigroup analysts raise oil forecasts. In their opinion, in 2019 Brent oil will cost an average of $ 70 per barrel (+ 5% to current prices). On the other hand, the action of OPEC + No. 2 is soon coming to its end, and there is no consensus on its future fate. We should not expect clarity before April and perhaps a decision would be taken directly upon the expiration of the current agreement period - in June. Despite the lack of clarity, we see no reasons for panic and continue to recommend buying an asset on the intraday basis.
Our other positions are unchanged: we buy gold on the intraday basis, we are looking for points for the Russian ruble sales (both on the intraday basis and medium-term positions).
WTI Crude oilCrude oil inventories have the sharpest decline in 8 months. With a forecast of 0.309M barrels of Crude Oil Inventories the actual figure was -9.589. On top of the dollar weakness this has caused WTI oil futures to jump above 60$.
Oil is trading above the 200EMA which will act as a strong level of support. Fundamental news that are affecting the price of oil is the fact that Russia and OPEC are doing so much to decrease output throughout the world. According to OPEC+ member countries are going to reduce the output of oil by 1.2 million barrels in 2019. Also, the cartel cancelled its meeting in April, meaning that they will keep these production cuts all through the slow season of summer up until June, when they will decide future action. We believe that OPEC and its allies will keep this policy all the way through the year.
A possible entry point for long position presents itself if price will dip down to the level of the 200EMA at 58.73. Entries can be made as low as 58.00 with stop losses located below 57.25.
US Oil: Week 11 Kick OffHi Guys,
Last week US Oil broke higher above the latest Trump's tweet with a run started on Wednesday. Price consolidated above Trump's tweet level with a triple bottom support throughout Thu, Fri and this morning before resuming the run pushed by the 90SMA.
TO NOTE: RSI spiked briefly above 70 but lower than previous highs. Price instead kept going higher. IMHO bullish momentum may push up to 60 if sentiment picks up above 70 again shortly.
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Disclaimer:
Please note that I am not a professional trader and these are my personal ideas only. The information contained in this presentation is solely for educational purposes and does not constitute investment advice. The risk of trading in securities markets can be substantial. You should carefully consider if engaging in such activity is suitable to your own financial situation. Cozzamara is not responsible for any liabilities arising from the result of your market involvement or individual trade activities.
