Trade n Trend

Oil trades near 2-week low as Canada wildfire threat lessens

Tue, May 10 2016, 06:00 GMT Bloomberg

Crude traded near a two-week closing low as wildfires in Canada moved away from the main oil-sands facilities, reducing the likelihood of a long period of reduced production levels.

Futures fell as much as 0.6 per cent in New York. The wildfires led to cuts equivalent to about 1 million barrels a day, or 40 per cent of the region’s production, based on IHS Energy estimates. A shift in winds away from the facilities and cooler weather limited damage to producers.

Once fires in Alberta are under control, the majority of oil sands mining projects could be back to normal production levels in about a week, Morgan Stanley said.

Oil has rebounded after slumping to the lowest level since 2003 earlier this year amid signs the global oversupply will ease as US output declines. While American production has dropped, the Organization of Petroleum Exporting Countries has boosted supply to more than 33 million barrels a day, underpinned by gains from Iran and Iraq.

West Texas Intermediate for June delivery fell as much as 25 US cents to US$43.19 a barrel onthe New York Mercantile Exchange and was at US$43.24 at 7:28 am Tokyo time.

The contract dropped US$1.22 to close at US$43.44 on Monday, the lowest in two weeks. Total volume traded was about 65 per cent below the 100-day average.

Brent for July settlement slipped US$1.74 to end the session at US$43.63 a barrel on the London-based ICE Futures Europe exchange on Monday. WTI for July closed at a 40-US-cent premium to Brent.

Saudi Arabia, the world’s largest crude exporter, replaced its oil minister Ali al-Naimi over the weekend with the chairman of state energy company Saudi Arabian Oil Co Khalid Al-Falih.

Speaking in January at the World Economic Forum in Davos, Mr Al- Falih indicated that Saudi Arabia plans to act vigorously to defend its market share and exports as the market re-balances.

Sources:  Bloomberg

Daily Market Our View 10/05/2016

EUR/USD

Short position below 1.148. Target 1.137. Conversely, break above 1.148, to open 1.153.

Comments: The pair hits support and bounces.

GBP/USD

Short position below 1.454. Target 1.437. Conversely, break above 1.454, to open 1.457.

Comments: The pair remains under pressure. Further weakness favored.

USD/JPY

Long position above 107.15. Target 108.75. Conversely, break below 107.15, to open 106.85.

Comments: The pair hits resistance and reverses.

AUD/USD

Short position below 0.7415. Target 0.73. Conversely, break above 0.7415, to open 0.7445.

Comments: The pair is expected to resume descend after correction.

GOLD

Short position below 1283. Target 1260. Conversely, break above 1283, to open 1287.

Comments: The pair remains under pressure. Further weakness favored.

CRUDE OIL

Short position below 45. Target 43. Conversely, break above 45, to open 46.15.

Comments: The pair breaks below support.

DOW JONES

Short position below 17720. Target 17440. Conversely, break above 17720, to open 17780.

Comments: The pair is expected to resume descend after correction.

Crude Oil Today Technical Report 09/05/2016

Mon, May 09 2016, 05:48 GMT SzrnFX

WTI gapped higher on Monday to trade above the 45.00 (S1) level. Nevertheless, the advance was halted by the 46.00 (R1) resistance line. The price structure on the 4-hour chart still suggests a short-term uptrend and as a result, I would expect a break above 46.00 (R1) to initially aim for the 46.80 (R2) hurdle, marked by the peak of the 29th of April. Our short-term oscillators detect upside momentum and support the case that the price is possible to trade higher in the near future. The RSI crossed above its 50 line, while the MACD, already above its trigger line, has just turned positive. Moreover, both the indicators lie above their respective upside support lines. As for the bigger picture, the price structure on the daily chart remains higher peaks and higher troughs above the uptrend line taken from the low of the 11th of February. This keeps the medium-term picture positive. Nevertheless, I still see negative divergence between the daily oscillators and the price action, revealing that the longer-term uptrend may have started losing some momentum.

OIL 09

Gold Today Technical Report 09/05/2016

Mon, May 09 2016, 08:45 GMT SzrnFX

Gold spiked higher on Friday after the below-than-expected NFP print. Nevertheless, it failed to reach the 1300 (R2) psychological barrier. It retreated and hit support at 1283 (S1). I would switch my stance to flat for now and I prefer to wait for a break above the psychological zone of 1300 (R2) before getting confident on larger advances. For now, our short-term oscillators give evidence that the precious metal may continue its retreat for a while. The RSI turned down and is now headed towards its 50 line, while the MACD, although positive, looks ready to fall back below its trigger line. A dip below 1283 (S1) could confirm the case and perhaps open the way for another test near the 1270 (S2) zone. Switching to the daily chart, I still believe that the longer-term trend is positive. However, I would like to see a clear close above 1300 (R2) before assuming its resumption. For now, I would treat any possible further declines in the near-term as a corrective phase.

GOLD 09

USD/JPY Today Technical Report 09/05/2016

Mon, May 09 2016, 08:41 GMT SzrnFX

USD/JPY traded higher on Friday and today during the Asian day, it managed to emerge above the (resistance now turned into support) line of 107.40 (S1). Now the rate looks to be headed towards the 107.80 (R1) barrier, where a decisive break is possible to see scope for extensions towards the next resistance zone of 108.70 (R2). Our short-term oscillators detect upside momentum and corroborate my view. The RSI moved above its 50 line, while the MACD, although negative, stands above its trigger line and looks ready to turn positive soon. Switching to the daily chart, I still see a longer-term downtrend. As a result, I would treat the recovery from 105.50 (S3), or any extensions of it, as a corrective phase for now.

YEN 09

EUR/USD Today Technical Report 09/05/2016

EUR/USD traded higher on Friday after the US employment report showed that nonfarm payrolls rose 160k in April, missing market expectations of 203k. The pair broke above the 1.1440 (R1) barrier, but failed to reach the 1.1500 (R2) line and within the following minutes, it retreated to break back below 1.1440 (R1) and to hit support at 1.1380 (S1). Bearing in mind that the rate is trading below the upside support line taken from the low of the 25th of April and below the short-term downtrend line drawn from the peak of the 3rd of May, I would consider the short-term bias to be cautiously negative. A clear dip below 1.1380 (S1) could confirm the case and could initially target our next support at 1.1335 (S2). Nevertheless, taking a look at our short-term oscillators, I see signs that a corrective bounce could be in the works before the next negative leg. The RSI turned up again and could aim for another test near its 50 line, while the MACD, although negative, shows signs of bottoming. Switching to the daily chart, I see that the pair started sliding after it hit resistance at 1.1620, near the prior upside support line taken from the low of the 13th of March. What is more, the pair is trading back below the 1.1500 hurdle, something that makes me stand pat as far as the broader trend of this pair is concerned.

EURO 09

EUR/USD consolidating ahead of German data

Mon, May 09 2016, 06:00 GMT SzrnFX

The EUR/USD is seen consolidating the downside as dust settles over the NFP aftermath, with the major catching fresh bid tone in recent dealings amid broad based US dollar retreat.

The greenback wiped-out gains against its major competitors and now trades muted, underpinning the recovery in EUR/USD. Moreover, mixed market sentiment amid higher oil prices and subdued Asian equities also lifts the safe-haven bids for the EUR.

Last week, the dollar edged higher against a basket of its major peers on Friday as remarks by a Federal Reserve official indicated that U.S. interest rates could still rise sooner than expected, despite a weaker than forecast employment report.

Focus Today Economic Data..

The German factory orders data amid a data-dry trading calendar today. Besides the Euro group meetings will be closely watched for any news on EU referendum ahead of the US LMCI release.

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