Oil prices have regained some of the previous day’s losses this morning as API recorded a build of 1.5m barrels in oil inventory, beating expectations of 3.4m. Oil continued to slide overnight as hopes for a coordinated output freeze begin to fade. WTI Oil and Brent Crude initially fell to $35.95 and $38.30 before pushing to $36.90 and $39.10 on the release of the data.
In recent weeks OIL prices have rallied as markets price-in expectations of production negotiations led by major oil producing nations; Saudi Arabia, Russia, Venezuela and Qatar. Despite monthly data released by OPEC on Monday indicating a 90K barrel decline in group output, production from Iran, Kuwait and Saudi Arabia continues to rise. This contraction in supply was driven by pipeline disruptions in Iraq and Nigeria. With sections of the pipeline already repaired, without confirmation of commitment from major oil producing nations, analysts are predicting a retesting of the $30 a barrel level.
Despite recent AUD volatility, all eyes will remain on the Federal Reserve meeting tomorrow for future dollar direction. The US continues to post improving employment data and stronger than expected core inflation figures. Goldman Sachs economists are expecting the Fed to hike by 25bp in June with scope for a further hike in April. Despite expectations, concern remains over the Fed potentially missing the opportunity to continue its rate hike cycle.
Currency Updates:
EUR/USD Intraday: testing the channel support.
Pivot: 1.1135
Our preference: short positions below 1.1135 with targets @ 1.1070 & 1.1030 in extension.
Alternative scenario: above 1.1135 look for further upside with 1.1165 & 1.1220 as targets.
Comment: the RSI is mixed with a bearish bias.
Supports and resistances:
1.1220 ***
1.1165 ***
1.1135 ***
1.1115 Last
1.1070 ***
1.1030 **
1.0985 **
USD/JPY Intraday: under pressure.
Pivot: 113.50
Our preference: short positions below 113.50 with targets @ 112.20 & 111.60 in extension.
Alternative scenario: above 113.50 look for further upside with 114.15 & 114.55 as targets.
Comment: the RSI is mixed to bearish.
Supports and resistances:
114.55
114.15
113.50
113.03 Last
112.20
111.60
111.00
GBP/USD Intraday: the downside prevails.
Pivot: 1.4250
Our preference: short positions below 1.4250 with targets @ 1.4130 & 1.4090 in extension.
Alternative scenario: above 1.4250 look for further upside with 1.4290 & 1.4335 as targets.
Comment: the RSI is mixed with a bearish bias.
Supports and resistances:
1.4335 **
1.4290 **
1.4250 ***
1.4156 Last
1.4130 ***
1.4090 **
1.4025 ***
AUD/USD Intraday: the downside prevails.
Pivot: 0.7500
Our preference: short positions below 0.7500 with targets @ 0.7425 & 0.7405 in extension.
Alternative scenario: above 0.7500 look for further upside with 0.7530 & 0.7555 as targets.
Comment: the RSI is badly directed.
Supports and resistances:
0.7555
0.7530
0.7500
0.7456 Last
0.7425
0.7405
0.7370
SPI 200 (ASX) (H6) Intraday: the downside prevails.
Pivot: 5190
Our preference: short positions below 5190 with targets @ 5075 & 5040 in extension.
Alternative scenario: above 5190 look for further upside with 5230 & 5262 as targets.
Comment: the RSI is around its neutrality area at 50%
Supports and resistances:
5262
5230
5190
5098 Last
5075
5040
5005
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