All eyes were on the Doha meeting over the weekend. OPEC and non-OPEC ministers failed to reach an agreement to limit/freeze oil production at January levels. Without Iran’s attendance, Saudi Arabia refused to cooperate to cap production, demanding commitments from all major producers before committing themselves. Following this failure to reach an agreement on capping oil production, oil price down around 6% with WTI under $38 at opening this morning. We expect the weakness to extend further into the week, irrespective of a potential second meeting on oil production to be held in June.
Currency market opened today with some big moves: USD/JPY at 108.25, USD/CAD at 1.2954 and AUD/USD at 0.7636. This is mainly due to a shift in the market risk sentiment after Doha meeting and commodity currencies are becoming the biggest victims. Additionally, NZD was the most volatile currency as CPI released in the early morning better than expected (0.2% vs 0.1%), driving it back from 0.6843 to 0.6907 at the time of writing.
The Gold price strengthened late last week after disappointing US data. A potential risk-off rally in gold prices might be seen in the following weeks, getting supported from Doha meeting’s failure to reach oil production freeze agreement.
Trade SPI 200 (ASX) (M6) Intraday: turning down
Pivot: 5150
Our preference: short @ 5113 with targets @ 5080 & 5045 in extension.
Alternative scenario: above 5150 look for further upside with 5180 & 5210 as targets.
Comment: the RSI is bearish and calls for further downside.
Supports and resistances:
5210
5180
5150
5113 Last
5080
5045
5006
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