Crude Oil Prices Edge Higher on Weaker US Dollar, EIA Report in Focus

CRUDE OIL OUTLOOK:

  • WTI wanton oil attempts to plea a pivotal insurgency turn during US$ 41.50
  • The US Dollar index fell for a second day on impulse hopes, improving sentiment
  • Oil traders eye pivotal EIA data, awaiting offer dump in stockpiles amid softening direct outlook

WTI wanton oil prices edged aloft on Wednesday, severe a pivotal insurgency turn during US$ 41.50. Oil prices were increasing by stimulus hopes and a descending US Dollar after US House Representatives Speaker Nancy Pelosi self-imposed a deadline for a White House to approve a service package. The DXY US Dollar index fell for a second day to 92.92 – a lowest turn seen in a month.

Oil traders are also eyeing Wednesday’s EIA inventory reports, awaiting a 1.02 million barrels tumble in US wanton oil stockpiles. Oil prices have historically exhibited a disastrous association with register changes, and a past 12 months’ information can be noticed on a draft below.

Crude Oil Prices Edge Higher on Weaker US Dollar, EIA Report in Focus

Source: DailyFX

In a middle term, falling wanton stockpiles would expected underpin WTI prices. Total US inventories (excluding vital petroleum reserves) have declined from 536.7 million barrels in Mid-July to 489.1 million barrels recently. Yet, a stream turn of US wanton oil inventories is about 11% above a 5-year normal for this time of year.

It is value noting, however, that descending wanton inventories should not facade a weakening direct outlook, that stays a pivotal drag to oil prices. Recent EIA reports have forked to declines in refinery inputs, gasoline prolongation and essence fuel production, as downstream direct weakened. Refineries operated during 75% of their operable ability in a week finale Oct 9th. US wanton oil imports have also depressed by scarcely half a million barrels a day from a prior week.

Introduction to Forex News Trading
Introduction to Forex News Trading

Flight information gathered by flightradar24 has also shown a slower gait of liberation in global flights numbers, that might offer as a good substitute for transport fuel direct (chart below). The 7-day relocating normal of sum flights tracked by a website was during 143,572 on Oct 20th, down by 26% from a same duration final year. The series of daily flights seemed to have come off a new rise seen in finish Sep as a effects of pandemic-related measures might have resulted in reduction travel.

Crude Oil Prices Edge Higher on Weaker US Dollar, EIA Report in Focus

Source: Flightradar24

Technically, WTI wanton oil prices demeanour set to re-test a pivotal insurgency in a US$ 41.00-41.50 area (highlighted on a draft below). Breaking above this turn might offer room for some-more upside intensity towards US$ 43.8 – a prior high. A shelter from stream levels might lead to offer converging during around US$ 40.00 (20-Day SMA).

WTI Crude Oil PriceDaily Chart

Crude Oil Prices Edge Higher on Weaker US Dollar, EIA Report in Focus

IG Client Sentiment shows that 48.82% of retail traders are net-long oil, with a ratio of traders brief to prolonged during 1.05 to 1 (chart below). Compared to a day ago, sell traders have significantly increasing their brief positions (+27.5%) while shortening prolonged positions (-16.8%). Compared to a week ago, a series of traders net-short has increasing by 45% while a net prolonged side has decreased by 19%. From a contrarian indicate of view, a extreme change in sell traders’ view towards a short-side disposition might infer offer strengthening in wanton oil prices.

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How to Use IG Client Sentiment in Your Trading

Crude Oil Prices Edge Higher on Weaker US Dollar, EIA Report in Focus

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— Written by Margaret Yang, Strategist for DailyFX.com

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Canadian Dollar Outlook: Retail Sales Data May Fuel USD/CAD Downtrend

Canadian Dollar, USD/CAD, CAD/JPY, Bank of Canada, Inflation – Talking Points:

  • Progress in US mercantile assist talks seemed to organisation marketplace view during APAC trade.
  • Retail sales and acceleration information might foreordain a opinion for a Canadian Dollar.
  • USD/CAD staid to extend declines as cost marks within cost channel.
  • CAD/JPY eyeing a pull to uninformed monthly highs.

Asia-Pacific Recap

The haven-associated US Dollar and Japanese Yen continued to remove belligerent opposite their vital counterparts during a Asian trade session, as swell in US mercantile impulse negotiations seemed to organisation marketplace sentiment.

Gold and silver prices edged aloft notwithstanding US 10-year Treasuries yields mountainous above 80 basement points for a initial time given June.

Australia’s ASX 200 index rose 0.12% and Japan’s Nikkei 225 index pushed behind above a 23600 mark, as SP 500 futures continued to trek higher.

Looking ahead, Canadian acceleration information for Sep headlines a mercantile calendar alongside speeches from European Central Bank President Christine Lagarde and Federal Reserve Governor Lael Brainard.

Canadian Dollar Outlook: Retail Sales Data May Fuel USD/CAD Downtrend

Market greeting draft combined regulating TradingView

Retail Sales Data to Dictate CAD

Upcoming sell sales and acceleration information might foreordain a near-term opinion for a Canadian Dollar, after a Bank of Canada’s Business Outlook Survey showed that “business view has softened though stays diseased opposite all regions [and] businesses design a gait of a liberation in their sales to slow”.

Surprisingly, notwithstanding business view remaining “well next a chronological average” and production sales for a month of Aug descending 0.6% some-more than a approaching 1.4% decline, a Canadian Dollar has continued to outperform a haven-associated Japanese Yen and US Dollar in new days.

Of course, this could be down to a new resiliency seen in oil prices this month, in tandem with a renewed hopes of a pre-election mercantile impulse package out of a US.

Nonetheless, a cyclically-sensitive banking has erased a waste it took after Tiff Macklem suggested that holding seductiveness rates into disastrous domain is still a possibility, with a Bank of Canada Governor saying that nonetheless a executive bank is “not actively deliberating disastrous seductiveness rates during this point”, it is still in “our toolkit and never contend never”.

Canadian Dollar Outlook: Retail Sales Data May Fuel USD/CAD Downtrend

Canadian Dollar comparison draft combined regulating TradingView

However, Macklem also uttered that “as most as a confidant process response was needed, it will fundamentally make a economy and financial complement some-more exposed to mercantile shocks down a road”, adding that “the bottom line is that a private and open sectors together need to be acutely wakeful of financial complement risks and vulnerabilities as a economy recovers”.

This could prove that Canadian policymakers are apropos some-more supportive to a intensity impact of choice financial process measures and might demur to palliate serve in a deficiency of a important decrease in mercantile data.

With that in mind, a Canadian Dollar might continue to outperform a haven-associated Japanese Yen and US Dollar, if arriving mercantile information encourages a Bank of Canada to retains it wait-and-see proceed to financial policy.

Canadian Dollar Outlook: Retail Sales Data May Fuel USD/CAD Downtrend

DailyFX Economic Calendar

Trading Forex News: The Strategy
Trading Forex News: The Strategy

USD/CAD Daily Chart – Descending Channel Guiding Price Lower

From a technical perspective, a USD/CAD sell rate’s opinion stays lopsided to a downside, as cost continues to lane within a proportions of a Descending Channel after unwell to mangle behind above feeder insurgency during a 21-day relocating normal (1.3200) and 38.2% Fibonacci (1.3228).

The growth of a RSI and MACD indicator hints during flourishing bearish momentum, as both oscillators continue to lane resolutely next their particular midpoints.

With that in mind, a daily tighten next a Oct 13 swing-low (1.3099) would substantially vigilance a resumption of a primary uptrend and carve a trail for cost to exam pivotal support during a 50% Fibonacci (1.3039).

Conversely, a annulment aloft could be in a offing if a psychologically commanding 1.3100 symbol successfully stifles shopping pressure, with a mangle behind above a 21-DMA (1.3200) potentially generating a exam of Descending Channel insurgency and a Oct 15 swing-high (1.3259).

Canadian Dollar Outlook: Retail Sales Data May Fuel USD/CAD Downtrend

USD/CAD daily draft combined regulating TradingView

CAD/JPY Daily Chart – Eyeing a Push to Fresh Monthly Highs

CAD/JPY rates seem to be gearing adult for a pull to uninformed monthly highs, as cost bounces divided from a sentiment-defining 200-MA (79.75) and breaks behind above insurgency during a Jul high (80.14).

With a RSI strengthening above a neutral median and a MACD indicator travelling absolutely in certain territory, a trail of slightest insurgency seems higher.

That being said, given a RSI has nonetheless to snap a downtrend fluctuating from a Jun extremes and cost hasn’t breached a Oct high (80.60), a near-term pullback is positively not out of a question.

Nevertheless, a daily tighten above a monthly high (80.60) would substantially beget a some-more guileless topside pull and potentially move pivotal insurgency during a Aug high (81.58) into focus.

On a other hand, disaster to mangle to uninformed monthly highs might enthuse would-be sellers and light a short-term pullback towards a Ascending Triangle uptrend, if support during a Jul high (80.14) gives way.

Canadian Dollar Outlook: Retail Sales Data May Fuel USD/CAD Downtrend

CAD/JPY daily draft combined regulating TradingView

— Written by Daniel Moss, Analyst for DailyFX

Follow me on Twitter @DanielGMoss

How to Use IG Client Sentiment in Your Trading
How to Use IG Client Sentiment in Your Trading

British Pound (GBP) Latest: GBP/USD Shrugs Off Dire UK Borrowing Data

GBP price, Brexit news and analysis:

  • UK open zone borrowing in a initial half of a stream financial year was some-more than 6 times a figure a year progressing due to a mercantile cost of a coronavirus pandemic.
  • Official information also showed that public-sector debt rose serve above a £2 trillion turn and reached a top as a commission of GDP given 1960.
  • UK acceleration in Sep rose to 0.5% from 0.2%.
  • Nonetheless, GBP/USD hold a belligerent as “risk-on” resources benefited from rising hopes that a US mercantile impulse package can be agreed.
  • The FTSE 100 index, though, is descending back.

GBP/USD circumference adult notwithstanding bad UK mercantile data

GBP/USD mostly abandoned a really bad set of UK borrowing, debt and acceleration information early Wednesday, suggesting some stability underlying vitality as “risk-on” resources benefited from rising hopes of a US mercantile impulse package, and mercantile strength in China.

There are also hopes that US-China family could urge if Joe Biden wins a US Presidential choosing on Nov 3.

GBP/USD Price Chart, One-Hour Timeframe (October 16-21, 2020)

Latest GBP/USD cost chart.

Chart by IG (You can click on it for a incomparable image)

GBP Forecast
GBP Forecast

FTSE 100 falls back, Brexit talks still a focus

By contrast, a FTSE 100 index of a vital London-listed bonds was weaker in early trade Wednesday and there was churned news on probable trade deals. While a EU-UK negotiations on their attribute once a Brexit transition duration ends on Dec 31 continue to uncover no signs of progress, a US and a UK have launched a new turn of talks focused on products and tariffs.

UK borrowing, debt and acceleration all rise

Turning to a UK economy, a cost of a coronavirus pestilence was clear in a really bad set of borrowing, debt and acceleration information expelled Wednesday before a UK markets opened. Government borrowing in a initial half of a 2020/21 mercantile year was some-more than 6 times a turn a year progressing due to a cost of ancillary a UK economy during a coronavirus pandemic.

Public zone debt climbed serve above £2 trillion to 103.5% of GDP, a top debt/GDP ratio given 1960.

However, a potentially disastrous impact of a borrowing and debt information was equivalent by a news that UK acceleration rose to 0.5% year/year in September, adult from 0.2% in August.

UK borrowing, acceleration data.

Source: DailyFX mercantile calendar

You can find a beam to reading an mercantile calendar here

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— Written by Martin Essex, Analyst

Feel giveaway to hit me on Twitter @MartinSEssex

USDJPY Price Hits a One-Month Low as a US Dollar Continues to Crumble

USDJPY Price, News and Analysis:

  • US dollar basket next 93.00.
  • USDJPY heads reduce as support breaks.
  • IG customer perspective is mixed.

The US dollar continues to trickle reduce and a dollar basket (DXY) is now next a remarkable short-term support turn around 93.00. The categorical motorist of a pierce – as we mentioned here during a weekend – is a ongoing US impulse check discussion. Tuesday’s some-more certain tinge for an agreement has weighed serve on a US dollar and taken it by a short-term support. The DXY is looking oversold currently, so a tiny short-term miscarry can't be ruled out.

US Dollar (DXY) Daily Price Chart (February – Oct 21, 2020)

USDJPY Price Hits a One-Month Low as a US Dollar Continues to Crumble

JPY Forecast
JPY Forecast

The Japanese Yen has pulled in a tiny bid currently as well, exacerbating a pierce lower. A demeanour during CHFJPY shows a new run aloft has stopped and incited reduce today, suggesting that a Japanese Yen is today’s elite reserve play. USDJPY currently overwhelmed a low of 104.87, a new one-month low and if perspective stays negative, dual new swing-lows between 104.00 and 104.19 come into play. The CCI indicator suggests a marketplace is oversold though not during new impassioned levels.

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Building Confidence in Trading

USDJPY Daily Price Chart (April – Oct 21, 2020)

USDJPY Price Hits a One-Month Low as a US Dollar Continues to Crumble

IG client information uncover 57.00% of traders are net-long with a ratio of traders prolonged to brief during 1.33 to 1.The series of traders net-long is 6.50% reduce than yesterday and 8.93% reduce from final week, while a series of traders net-short is 1.14% reduce than yesterday and 8.98% reduce from final week.

We typically take a contrarian perspective to throng sentiment, and a fact traders are net-long suggests USD/JPY prices might continue to fall.Positioning is reduction net-long than yesterday though some-more net-long from final week. The multiple of stream perspective and new changes gives us a further churned USD/JPY trade bias.

What is your perspective on the Japanese Yen – bullish or bearish?? You can let us know around a form during a finish of this square or we can hit a author around Twitter @nickcawley1.

USD/ZAR (Rand) Price Forecast: Pre-election Stimulus Package Revisited

USD/ZAR ANALYSIS

  • Pre-election impulse package stays a possibility
  • USD/ZAR falling wedge arrangement supports serve downside
  • Accommodative tellurian risk-on outlook

President Donald Trump has put revised US impulse hopes behind on a list with comments that he might go opposite members of a Republican celebration that could means inner difficulties. Senate Majority Leader Mitch McConnell has disclosed a fact that he has suggested opposite final a understanding with House Speaker Nancy Pelosi before a Nov 3 elections.

A pre-election service package could support serve Rand strength though a disaster to do so might see short-term Rand debility as choosing jitters set in. The US Dollar and other normal safe-haven counterparts might see increasing movement with rising sensitivity approaching over a subsequent few weeks.

Visit a DailyFX Educational Center to learn because news events are Key to Forex Fundamental Analysis

USD/ZAR TECHNICAL ANALYSIS

USD/ZAR weekly chart:

USD/ZAR weekly chart

Chart prepared by Warren Venketas, IG

The weekly draft next exhibits a text falling wedge arrangement that is revealing of a bullish (upward) continuation. Currently USD/ZAR stays within a crowd itself that could see serve ZAR strength toward crowd support before cost pushes aloft – as a arrangement implies.

USD/ZAR daily chart:

USD/ZAR daily chart

Chart prepared by Warren Venketas, IG

The daily draft highlights poignant support (green) between a 16.3444 38.2% Fibonacci turn and 16.5000 psychological level given early June. While cost has been contrast these levels over Q3 and Q4, marketplace participants are watchful for a bigger pull divided from a new laterally consolidation. A auspicious impulse preference for a Rand might see a 16.0835 being tested as initial support if a 16.3444 38.2% Fibonacci turn is broken.

USD/ZAR bulls will aim a 16.7199 (blue) as a new pitch high in a eventuality that a impulse package is not upheld before to Nov 3.

DOMESTIC FACTORS AFFECTING THE RAND

With no poignant news or events this week, a Rand has been during a forgiveness of tellurian influences and risk sentiment. A solid appreciation of a Rand has continued nonetheless still fluctuates around a 16.5000 pivotal plane level. Attention will be focused globally for a residue of a week with a tighten eye on a US coronavirus service package negotiations.

Next week binds several pivotal announcements for a Emerging Market (EM) currency with unemployment, acceleration information and Finance Minister Tito Mboweni’s Medium Term Budget Speech (MTBS) being a categorical attractions. Although these events are expected to means some change in ZAR crosses, tellurian factors will sojourn a primary cost change motorist for a internal currency.

DailyFX Economic Calendar:

economic calendar

Trading Forex News: The Strategy
Trading Forex News: The Strategy

USD/ZAR: KEY POINTS TO CONSIDER MOVING FORWARD

The Rand stays auspicious to tellurian investors as it endures as an appealing lift relations to some-more grown economy currencies. Local bond markets counterpart this with yields on both a R2023 and R2030 remaining intensely appealing for high-yield seeking investors respectively. Most marketplace participants are positioned for serve ZAR strength toward a 15.5000 – 16.0000 section after that we trust positioning will be reviewed. The undervalued inlet of a Rand (according to a Purchasing Power Parity model) encourages probable longer-term strength.

Uncertainty around a US impulse package is a categorical cause concerning EM currencies so any certainty around negotiations will expected give a USD/ZAR span a short-term directional bias. Key points to consider:

  • US impulse negotiations
  • Falling crowd pattern
  • Expected arise in volatility
  • Next week’s South African information

— Written by Warren Venketas for DailyFX.com

Contact and follow Warren on Twitter: @WVenketas