Forextime.com Daily Market Analysis
Oil bears pounce on initial data
Oil markets continued to be a weird mix as of late as the market expects -2.06M barrels from tomorrows reading, however private inventory data readings are initially suggesting there is the biggest build up of crude oil in over 6 weeks, leading to many rethinking tomorrows prediction. So far oil has slipped slightly as a result and this was on the back of a weakening in the USD. Predictions so far have been that OPEC will look to impose its tightening in order to bolster the market, but if the market is still showing signs of a build up it may require further action in the future to up the price of oil - something that most members will not be looking forward to the idea of.
Oil on the charts has been very bullish in recent weeks on the back of all the noise from OPEC and the market certainly believes prices will increase in the long run. So far the level that many are looking to beat and is acting as stiff resistance in the market is at 54.96 and looks likely to face further technical pressure unless there are any major fundamental announcements. Beyond this level the next leg could be found at 60.12 which also acts as a major psychological level for the most part. Any movements lower are likely to touch the 20 day moving average and in this case I would anticipate it to act as dynamic support as we have previously seen.
NZDUSD traders will be watching the events of today after it appeared that the NZDUSD was able to find some footing after recent bearish movements in the previous week. The surge today looked quite strong, but it was all on the back of USD selling and had little to do with the current economic outlook for New Zealand for the most part. While I would anticipate the NZ economy bouncing back, the stage is certainly focused on the US economy for the most part and any bullish movements should be treated as something not to focus to intently on. Commodity prices for the NZ economy continue to remain subdued and it seems this won't change in the short term just yet, but they will eventually recover and aid the current economy.
Technically speaking the NZDUSD is always a tricky one to play with, but the rise upwards towards resistance at 0.6948 is looking quite bullish in the short term. However, it would seem unlikely that it could push through psychological barrier of 0.70 which has always been a big ask for traders. Further legs back down are likely to find strong support at 0.6874, but the market is pricing in further moves lower I feel, but it could take further strong US data to really get it pushing towards the 0.65 mark.
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By Alex Gurr, Guest Analyst