Crude oil rallied to its highest level in 6 months as supply factors in Nigeria, Libya, and Venezuela shake the market while fires in Alberta continue to rage. Crude prices have faced considerable strength over the last two weeks as Nigeria oil output hits its lowest level in decades following militant sabotage of oil facilities. As militia war ravages the Niger Delta, conflict in Libya continues to limit the country’s ability to produce. Faltering supply from African producers and the devastating impact of Alberta’s wildfire have supported the recent oil rally. West Texas Crude (WTI) has rallied over 3.3% to $47.85/bbl while Brent Crude posted gains over 2.3%, currently trading at $49.05/bbl. As oil prices consolidate around the $50/bbl level, US shale production will begin to increase. If stability in African nations returns and US shale production ramps up there is potential for oil to retrace to $45/bbl level.
US equities posted significant gains overnight with the S&P500 and DJIA up 1%. The energy sector outperformed with 1.6% lift helped by the surging oil prices. Apple is up 3.7% boosted by news that Warren Buffett’s Berkshire Hathaway has a holding worth 1bn.
Currency Updates:
Trade EUR/USD Intraday: key resistance at 1.1365.
Pivot: 1.1365
Our preference: short positions below 1.1365 with targets @ 1.1280 & 1.1245 in extension.
Alternative scenario: above 1.1365 look for further upside with 1.1390 & 1.1415 as targets.
Comment: as long as the resistance at 1.1365 is not surpassed, the risk of the break below 1.1280 remains high.
Supports and resistances:
1.1415 ***
1.1390 **
1.1365 ***
1.1321 Last
1.1280 ***
1.1245 **
1.1215 ***
Trade USD/JPY Intraday: the bias remains bullish.
Pivot: 108.20
Our preference: long positions above 108.20 with targets @ 109.40 & 109.90 in extension.
Alternative scenario: below 108.20 look for further downside with 107.40 & 107.00 as targets.
Comment: even though a continuation of the consolidation cannot be ruled out, its extent should be limited.
Supports and resistances:
110.50
109.90
109.40
108.94 Last
108.20
107.40
107.00
Trade GBP/USD Intraday: further advance.
Pivot: 1.4420
Our preference: long positions above 1.4420 with targets @ 1.4530 & 1.4570 in extension.
Alternative scenario: below 1.4420 look for further downside with 1.4380 & 1.4335 as targets.
Comment: the RSI calls for a new upleg.
Supports and resistances:
1.4600 ***
1.4570 ***
1.4530 ***
1.4482 Last
1.4420 ***
1.4380 ***
1.4335 ***
Trade AUD/USD Intraday: turning up.
Pivot: 0.7280
Our preference: long positions above 0.7280 with targets @ 0.7370 & 0.7400 in extension.
Alternative scenario: below 0.7280 look for further downside with 0.7245 & 0.7220 as targets.
Comment: the RSI calls for a new upleg.
Supports and resistances:
0.7435
0.7400
0.7370
0.7350 Last
0.7280
0.7245
0.7220
Trade SPI 200 (ASX) (M6) Intraday: further upside.
Pivot: 5340
Our preference: long positions above 5340 with targets @ 5450 & 5500 in extension.
Alternative scenario: below 5340 look for further downside with 5302 & 5270 as targets.
Comment: the RSI is mixed to bullish.
Supports and resistances:
5540
5500
5450
5404 Last
5340
5302
5270
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