WTI Crude Oil saw the 80.000 USD level penetrated upwards on Wednesday of last week, only to falter and then begin a rather steady push lower.
The price of WTI Crude Oil this week will begin trading near the 77.120 mark, this after touching a depth around the 76.640 ratio this past Friday.
The ability to trade downwards and come within sight of values seen the previous Friday while testing mid-terms lows could prove to be significant.
However, before traders rush into to say the dominant trend is downwards, they should acknowledge that a run higher early last week in WTI Crude Oil achieved a high of nearly 80.590 on Wednesday.
The incremental move higher starting last week only to run into headwinds after month long resistance was tested is noteworthy. Also of importance is that OPEC will be conducting a meeting today to discuss pricing and production. WTI Crude Oil’s ability to move back to mid-term lows before the oil conference will spark intrigue and concerns in the minds of speculators.
Support Levels and Early Trading in WTI Crude Oil this Week
Large players in WTI Crude Oil will react immediately to news coming from OPEC later today and early tomorrow. There should be no doubt that OPEC would like to see a stable price that floats near higher ratios. Their decisions regarding production levels will certainly affect sentiment. The consideration that WTI Crude Oil is near the lower elements of its healthy price range may mean that OPEC continues production at its current levels. However, I have no inside knowledge. Wagering on what OPEC says is best left to insiders.
From a fundamental standpoint demand and supply remain balanced in WTI Crude Oil. The U.S economy is showing signs of slowing down and this may curtail some usage, but it should not be counted upon. The ability of WTI Crude Oil to remain within sight of the 77.000 price is important and early trading Monday should be monitored intently. One consideration for day traders to lean upon may be the notion that it is highly unlikely that OPEC will say anything which will cause weakness in the price of WTI Crude Oil. They do not want to hurt the price of their commodity.
Early Reactions in WTI Crude Oil on Monday
If WTI Crude Oil creates price velocity early on Monday this would be interesting and it would likely be to the upside, and then potentially run into resistance which could create an opportunity for day traders to look for opportunities. However, if Crude Oil were to trade lower early tomorrow this could signal that traders who have been leaning towards bearish sentiment may believe there is more room to explore downwards, this if OPEC hasn’t said anything noteworthy which gives sellers concerns.
If the price of WTI Crude Oil falls below 77.000 early on Monday and sustains value below this could be a signal selling sentiment remains strong and lower depths could be tested.
If WTI Crude Oil opens with strong buying day traders are advised to stay on the sidelines and look for resistance to be approached technically and then consider selling for quick hitting lower moves.
WTI Crude Oil Weekly Outlook:
Speculative price range for WTI Crude Oil is 75.80 to 80.600
Traders will certainly have to be on the lookout for a surprising statement from OPEC which creates velocity in WTI Crude Oil which is always a danger after their conferences. Yet, if news remains calm and no new developments cause massive reactions, the price of WTI Crude Oil should remain with its current speculative price range.
The move downwards at the end of last week after achieving highs is interesting and may indicate bearish sentiment remains a bit stronger than buyers at this time. Traders looking for lower movement that challenges anything penetrating the 76.000 level may be too ambitious, but the reaction early on Monday and into Tuesday after the OPEC meeting outcome is announced will certainly be important impetus and could cause new dynamics.
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EUR/USD remained in a bearish zone and declined below 1.0530. USD/JPY is again rising and might climb toward the 150.00 level.
Important Takeaways for EUR/USD and USD/JPY Analysis Today
The Euro started a fresh decline below the 1.0530 support zone.
There is a short-term bearish trend line forming with resistance near 1.0475 on the hourly chart of EUR/USD at FXOpen.
USD/JPY climbed higher above the 148.00 and 148.75 levels.
There was a rejection noticed near a bearish trend line at 150.15 on the hourly chart at FXOpen.
EUR/USD Technical Analysis
On the hourly chart of EUR/USD at FXOpen, the pair remained in a bearish zone below the 1.0650 level, as mentioned in the previous analysis. The Euro declined below the 1.0530 support zone against the US Dollar.
The pair even settled below the 1.0500 zone and the 50-hour simple moving average. A low is formed near 1.0448 and the pair is now consolidating losses. On the upside, the pair is now facing resistance near a short-term bearish trend line at 1.0475.
The next key resistance is near the 50-hour simple moving average and the 23.6% Fib retracement level of the recent decline from the 1.0617 swing high to the 1.0448 low at 1.0485.
A clear move above the 1.0485 level could send the pair toward the 1.0530 resistance. It is close to the 50% Fib retracement level of the recent decline from the 1.0617 swing high to the 1.0448 low. An upside break above 1.0530 could set the pace for another increase. In the stated case, the pair might rise toward 1.0615.
If not, the pair might resume its decline. The first major support on the EUR/USD chart is near 1.0450. The next key support is at 1.0420. If there is a downside break below 1.0420, the pair could drop toward 1.0380. The next support is near 1.0335, below which the pair could start a major decline.
USD/JPY Technical Analysis
On the hourly chart of USD/JPY at FXOpen, the pair started a decent increase from the 145.00 zone. The US Dollar gained bullish momentum above 148.00 against the Japanese Yen.
It settled above the 50-hour simple moving average and 148.75. However, the pair faced a rejection noticed near a bearish trend line at 150.15. There was a sharp decline below the 148.00 level. However, it turned out to be a false move and the price trimmed most losses.
It is back above the 148.75 level and the 61.8% Fib retracement level of the downward move from the 150.15 swing high to the 147.32 low.
Immediate resistance on the USD/JPY chart is near the 50-hour simple moving average at 149.50. It is close to the 76.4% Fib retracement level of the downward move from the 150.15 swing high to the 147.32 low.
The first major resistance is near 150.15. If there is a close above the 150.15 level and the RSI moves above 50, the pair could rise toward 151.20. The next major resistance is near 152.00, above which the pair could test 153.50 in the coming days.
On the downside, the first major support is near 148.75. The next major support is 148.00. If there is a close below 148.00, the pair could decline steadily.
In the stated case, the pair might drop toward the 147.30 support zone. The next stop for the bears may perhaps be near the 145.50 region.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
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The NASDAQ 100 is an indicator of risk appetite that a lot of people will be following closely for September. After all, September is a little bit different than many other months, as there is a surge of volume coming back in, as the trading public comes back from summer vacation. Because of this, the early part of the month of September will probably be very choppy.
Beyond that, the first month day of the month is the Non-Farm Payroll announcement, so it does suggest that perhaps you can’t read too much into the very beginning of the month. Furthermore, the following Monday will be Labor Day in America, so we really don’t get back to business until the middle of the week. At that point, it’ll be interesting to see how things play out, but it’s obvious that the market favors the upside in general.
Keep in mind that the NASDAQ 100 is a major index as far as “putting money to work”, as there are a handful of stocks that seem to be driving everything.
Whether or not we go back to the “AI narrative” will have a lot to do with what happens here, but the overall attitude of the market looks very positive from the technical analysis standpoint.
After all, it looks like on the weekly chart we are forming a bit of a bullish flag, and therefore I think the signal as to whether or not we are going to continue to go higher would be a daily close above 15,900.
If we can break that area, then the 16,000 level obviously causes a bit of resistance but opens up the gateway to the market going much higher, giving an opportunity to hang on for what could be the next couple of months.
On the other hand, if we do pull back, the 14,600 level could be an area that attracts a lot of support, followed by the 13,750 level where the 50-Week EMA comes into the picture, and I do believe that is the “bottom of the overall uptrend. As long as we can stay above there, then the market is likely to continue to attract buyers. However, if we do see the market breakdown below there, then it could lead to a much deeper correction. The question is whether or not the narrative can hold between now and the end of the year, because right now it looks like everybody’s excited about the possibility of the Federal Reserve slowing down monetary tightening, which also has money looking for hot stocks like the ones that make up most of the movement here.
S&P 500 Forecast: September 2023
The S&P 500 has had a very noisy month for August, but at the end of the day, this is a market that is still in an uptrend. I think we’ve got a situation where we eventually take off to the outside based on the idea of the bullish flag that we are currently forming. It does not mean that it will necessarily be easy to hang on to the next move, but at the end of the day, the reality is that the market had a short-term pullback. It seems like we are turning around to show signs of life. If the market were to break to a fresh, new high, then the market is likely to continue to go looking toward the 4850 level, possibly followed by the 5000 level.
Short-term pullback at this point certainly will be paying close attention to the 4330 level, an area that has offered a little bit of support.
As long as we can say above there, I think the market continues to go higher, but even if we fell all the way down to the 4200 level, that is what I look at as the “bottom of the uptrend” going forward.
Clearly, when traders come back from the summer break/holiday season, then it certainly makes quite a bit of sense that we would see volatility and momentum picked back up.
Further adding more interest to the 4200 level, we have the 50-Week EMA coming into the picture, so I think the market will look at that as a very important level as well. Either way, it looks like the S&P 500 is being driven higher, for no other reason than the fact that yields continue to drop. Pay close attention to the US treasury markets, because if yields continue to drive, that might be reason enough for stocks to go higher. We are through earnings season, so at this point there will be the next narrative to sell stocks to the public coming out of Wall Street. After all, that’s what Wall Street does, sells stocks to the public.
All things being equal, the bullish flag does suggest that we are going to go higher, so I still have quite a bit of interest in going long, so I might approach September more with a “buy on the dip” attitude. This of course assumes that we even get that opportunity.
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An increase in the bulls’ pressure may push the price to reach the resistance level of $1.35 and this may push up the price to penetrate the mentioned resistance level, the resistance level of $1.36 and $1.37 may be tested. Should the resistance level of $1.35 holds, price may reverse and decrease to the support level of $1.34, $1.33 and $1.32.
GBPUSD Market
Key levels:
Resistance levels: $1.35, $1.36, $1.37
Support levels: $1.34, $1.33, $1.32
GBPUSD Long-term trend: Bullish
GBPUSD is bullish on the daily chart. The currency pair embark on the bullish movement on the daily chart since November 12. It initially found support at $1.33 on November 11. A bullish engulfing candle formed and the price commenced a bullish movement. The former resistance levels of $1.34 has turned to support level. The price may reach $1.35 level.
Today, bulls are ruling the GBPUSD market as the daily bullish candle opens the market. The currency pair is trading above the 9 periods EMA and the 21 periods EMA which indicate a bullish market. The relative strength index period 14 is above 60 levels with the signal lines pointing upside to indicate buy signal. An increase in the bulls’ pressure may push the price to reach the resistance level of $1.35 and this may push up the price to penetrate the mentioned resistance level, the resistance level of $1.36 and $1.37 may be tested. Should the resistance level of $1.35 holds, price may reverse and decrease to the support level of $1.34, $1.33 and $1.32.
GBPUSD Medium-term Trend: Bullish
GBPUSD is on the bullish movement in the medium-term outlook. The bulls gained more pressure at $1.33 support level and the price is soaring towards $1.35 resistance level when the bears’ pressure failed and could not break down the $1.33 support level. At the moment, buyers are gaining more pressure and price increasing accordingly.
Today, the bulls are dominating the market and the price is trading above the 9 periods EMA and the 21 periods EMA as an indication of bullish market. However, the relative strength index period 14 is above 80 levels pointing upside to indicate buy signal.
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Dow needs to sustain above 36250/000 to keep the uptrend intact while Dax also needs to hold above 16000 to keep the bullish momentum intact for the near to medium term. Nikkei and shanghai have fallen and unless both sustain above 29500 and 3450, view is bearish for the near term. Nifty and Sensex have bullish scope intact while above 18000 and 60000 respectively.
Dow (36319.98, -112.24, -0.31%) has come down after testing the high of 36565.73 yesterday. A fall below 36250/000 is needed for our view to turn bearish. While above 36000/250, we may expect a test of 36500 and 37000 eventually.
DAX (16040.47, -6.05, -0.038%) has dipped slightly today but while above 16000, view remains bullish to see a test of crucial resistance at 16400.
Nikkei (29200.04, -84.63, -0.29%) has broken below the support at 29500. While below 29500 a fall towards 28000 is possible in the coming sessions before we see a bounce again. Our earlier mentioned bullish view towards 30000/31000 is negated while below 29500.
Shanghai (3461.98, -48.62, -1.28%) as come down sharply below 3475 resistance mentioned previously. A further fall below 3450, if seen will be bearish towards 3400. A strong break above 3475/3500 is needed to see a rise towards 3550+.
COMMODITIES
Crude prices have surged as the US has opened its borders for international travel indicating a boost in jet fuel demand going ahead. Brent can rise to 87.50 while WTI can rise to 86 in the near term. Gold has dipped a bit while below 1835/40 but it needs to break on the upside soon to continue moving higher in the coming sessions. Copper has dipped while below 4.45 but can again bounce back from 4.25 soon. Silver is headed towards 24.65-25 while above 24.
Brent (85.20) and WTI (84.34) have risen sharply as the US reopened the country’s borders for international travel as a sign of an increase in demand for jet fuel going ahead. We may have to allow for a rise to 87.50 and 86 on Brent and WTI respectively.
Gold (1830.30) has dipped from 1832.72 and has interim resistance in the 1835-1840 region which if holds can produce a decline towards 1810-1800 on the downside before again a sharp rise is seen. Else an immediate break above 1835/40 is needed to give more weightage for further bullishness. That if seen may put downtrend since 2100 (Aug’20) into question.
Silver (24.32) looks stable just now and while above 24, there is scope for a rise to 25. Interim resistance is seen near 24.65/70 which if holds can produce a fall towards 24-23 in the medium term.
Copper (4.3615) tested 4.45 yesterday before coming off rom there. As mentioned yesterday, 4.45 may act as a decent resistance for the near term, pushing the price down towards 4.30/25before again attempting to bounce back towards 4.45/50 in the medium term.
FOREX
Dollar Index and Euro seem stable just now. Dollar Index holds above support near 93.65 while Euro is falling while below decent resistance near 1.16-1.1650. Aussie, EURJPY, Pound and Dollar Yen all look strongly bearish for the near to medium term. USDCNY can be ranged within 6.3750/38-6.40 while USDINR can attempt to rise to 74.20/25-74.40/50 before falling from there.
Dollar Index (94.023) has bounced from 93.87 and while above 93.75/60, the index could remain higher within 93.65-94.25 region. A break on either side in the near term will indicate further direction.
Euro (1.1583) tested 1.1609 yesterday before falling off from there. While below 1.16-1.1650 region we may keep intact our bearish view of seeing a test of 1.15-1.14 .
EURJPY (130.71) has support near 130.50 which if holds can produce a bounce to 131.50-131.75 before the cross again resumes its downtrend towards 130-129.50.
Aussie (0.7364) has fallen sharply and may continue to fall while below 0.74. The view is strongly bearish for a target of 0.7350-0.7315.
Pound (1.3559) had risen to 1.36 but came off sharply from there. While below 1.36, a fall to 1.35 is possible. Unless a break on either side of 1.36-1.35 is seen, it may remain in a sideways consolidation. Broad range of 1.37-1.33 may hold for a couple of weeks.
Dollar-Yen (112.85) has fallen breaking below 113. View is strongly bearish just now and there is scope for a fall to 112.55-112 in the medium term.
USDCNY (6.3935) tested 6.3869 yesterday and has bounced from there. A range of 6.40-6.3750/38 can hold for the near term before a decisive rise is seen.
INTEREST RATES
US Treasury Yields remain stable at the near-end while those at the far-end has dipped further. There is room for the 10Yr and 30Yr to dip further to test their key supports and then bounce-back again. We expect the Treasury yield to remain in a broad sideways range for some time. The German Yields have come down towards their intermediate supports much faster than expected. A corrective bounce is possible in the coming days before the broader downmove resumes. The 10Yr and 5Yr GoI dipped further yesterday and keeps our bearish view intact of falling further from here.
The US 2Yr (0.43%) and the 5Yr (1.09%) Treasury yields remain stable while the 10Yr (1.46%) and 30Yr (1.83%) have dipped slightly. Our view remains the same. 1.4%-1.35% (10Yr) and 1.8%-1.75% (30Yr) are important supports that can be tested in the near-term. We expect the yields to bounce from there and remain in a broad range of 1.35%-1.65% (10Yr) and 1.75%-2.1/2.2% (30Yr) for some time.
The German 2Yr (-0.76%), 5Yr (-0.59%), 10Yr (-0.30%) and the 30Yr (0.0%) have declined again sharply across tenors. The 30Yr has dipped to -0.3% as expected and has room to extend the fall to -0.4% before bouncing back again. The 30Yr has come down to 0% much faster than anticipated and can see a corrective bounce to 0.1% from here and then a fresh fall to -0.1% and -0.2% can be seen.
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