Global equity markets slumped overnight as oil prices tumbled. Oil fell for the second straight day as hopes of supply cooperation between OPEC and non-OPEC states fade. API crude oil inventories data recorded its highest level since the 1930s with crude supplies rising by 3.8 million bbls. WTI is currently trading at $29.65/bbl and BRT at $32.47/bbl as demand concerns remain amid excessive supply and a mild winter.
Weak earnings from oil companies contributed to the oil frenzy dragging indices downward. The US equity markets struggled as energy stocks took a hit, with the DJIA and S&P500 both down 1.8%. European markets were unable to avoid sell off as the DAX and FTSE fell 1.81% and 2.28% respectively.
Markets expected the RBA’s hold on rates yesterday as they followed the language of both RBNZ and ECB regarding their easing bias. They identified the potential for emerging risks as well as posing some skepticism regarding the unsustainability of recent labour market strength. The RBA predicts inflation to remain low over the coming year or two. The AUD weakened against the USD following the announcement, currently sitting around the 0.7010 level.
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Currency Updates:
EUR/USD Intraday: key resistance at 1.094.
Pivot: 1.094
Our preference: short positions below 1.094 with targets @ 1.089 & 1.0875 in extension.
Alternative scenario: above 1.094 look for further upside with 1.0965 & 1.0995 as targets.
Comment: the upward potential is likely to be limited by the resistance at 1.094. The pair broke below a rising trend line
Supports and resistances:
1.0995 ***
1.0965 **
1.094 **
1.0924 Last
1.089 **
1.0875 *
1.086 ***
USD/JPY Intraday: under pressure.
Pivot: 120.9
Our preference: short positions below 120.9 with targets @ 119.6 & 119 in extension.
Alternative scenario: above 120.9 look for further upside with 121.4 & 121.7 as targets.
Comment: the RSI is bearish and calls for further decline. The pair has confirmed a Rounding Top: a bearish reversal pattern.
Supports and resistances:
121.7 *
121.4 *
120.9 ***
119.82 Last
119.6 *
119 **
118.5 **
GBP/USD Intraday: key resistance at 1.448.
Pivot: 1.448
Our preference: short positions below 1.448 with targets @ 1.4325 & 1.4245 in extension.
Alternative scenario: above 1.448 look for further upside with 1.4535 & 1.459 as targets.
Comment: the RSI is mixed and calls for caution. The bullish channel resistance maintains a bearish bias.
Supports and resistances:
1.459 **
1.4535 **
1.448 ***
1.441 Last
1.4325 *
1.4245 **
1.4185 **
AUD/USD Intraday: the downside prevails.
Pivot: 0.708
Our preference: short positions below 0.708 with targets @ 0.7 & 0.6965 in extension.
Alternative scenario: above 0.708 look for further upside with 0.712 & 0.7174 as targets.
Comment: the RSI is bearish and calls for further downside.
Supports and resistances:
0.7174 **
0.712 **
0.708 **
0.7032 Last
0.7 *
0.6965 **
0.694 *
SPI 200 (ASX) (H6) Intraday: under pressure.
Pivot: 4925
Our preference: short positions below 4925 with targets @ 4850 & 4790 in extension.
Alternative scenario: above 4925 look for further upside with 4955 & 5020 as targets.
Comment: as long as the resistance at 4925 is not surpassed, the risk of the break below 4850 remains high.
Supports and resistances:
5020
4955
4925
4869 Last
4850
4790
4720
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