Oil is set to break up the price channel. Lucky this time?
Oil has risen in five of the last six trading sessions, gaining almost 4%. With a lower volatility, Crude may be preparing for a big move higher.
US commercial oil inventories plunged by 10.6M barrels last week and have fallen by almost 34M over the past five weeks. Inventories are now only 1.1% higher than the same week the previous year. This is despite the release of over 100M barrels, or 22%, of the US Strategic Petroleum Reserve during this period.
Oil has risen in five of the last six trading sessions, gaining almost 4%. With a lower volatility, Crude may be preparing for a big move higher.
US commercial oil inventories plunged by 10.6M barrels last week and have fallen by almost 34M over the past five weeks. Inventories are now only 1.1% higher than the same week the previous year. This is despite the release of over 100M barrels, or 22%, of the US Strategic Petroleum Reserve during this period.
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There is an oil shortage in the US market. Oil producers are trying to fill the gap by increasing production to 12.8 million BPD in August, up from 12.2 million a month and 12.1 million a year earlier.
But it is also clear that companies are in no hurry to invest in expanding production, as the number of active rigs has been falling almost every week since last November. Probably, this is the response to a sharp tightening of monetary conditions, pessimistic economic forecasts, and the US government's attempts to suppress prices by selling off its strategic stockpile. Add to this the lukewarm attitude to investment in conventional hydrocarbons as part of an environmental agenda.
It is also likely that the 'interest' of oil producers waned as the price settled into a range consistently below $80, while several attempts to push the price back above met with solid resistance.
August could be an essential turning point for prices in this regard. This is undoubtedly the case on the WTI price chart.
But it is also clear that companies are in no hurry to invest in expanding production, as the number of active rigs has been falling almost every week since last November. Probably, this is the response to a sharp tightening of monetary conditions, pessimistic economic forecasts, and the US government's attempts to suppress prices by selling off its strategic stockpile. Add to this the lukewarm attitude to investment in conventional hydrocarbons as part of an environmental agenda.
It is also likely that the 'interest' of oil producers waned as the price settled into a range consistently below $80, while several attempts to push the price back above met with solid resistance.
August could be an essential turning point for prices in this regard. This is undoubtedly the case on the WTI price chart.
Early last week, buyers supported oil immediately after falling below $78, the 61.8% Fibonacci retracement of the rally from the June lows (at $67) to the August highs (at $84). This correction has cleared the medium-term overbought condition, with the RSI on the daily chart moving back from over 70.
The reversal to the upside also coincided with the formation of a golden cross, where the 50-day moving average crosses the 200-day MA from below, impacting market sentiment.
The actions of OPEC+ to extend existing restrictions and the recent additional cuts are helping to create a bullish picture on the chart. These efforts have been fruitful so far, as Russia and Saudi Arabia have increased gross oil revenues despite lower production, as higher prices have offset lower sales volumes.
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The reversal to the upside also coincided with the formation of a golden cross, where the 50-day moving average crosses the 200-day MA from below, impacting market sentiment.
The actions of OPEC+ to extend existing restrictions and the recent additional cuts are helping to create a bullish picture on the chart. These efforts have been fruitful so far, as Russia and Saudi Arabia have increased gross oil revenues despite lower production, as higher prices have offset lower sales volumes.
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Personal spending by Americans in July points to increased risks of a return to inflation. Consumer spending rose 0.8% in July, following a 0.7% increase a month earlier. Meanwhile, incomes rose 0.2% in July and 0.3% in June. Disposable personal income was unchanged in July after increasing 0.2% a month earlier.
As a result, personal savings fell to 3.5% of income, the lowest since last October, down from 4.7% two months ago.
As a result, personal savings fell to 3.5% of income, the lowest since last October, down from 4.7% two months ago.
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These are signs of inflationary pressures in the US, contrary to the slump in many commodity prices that fuelled inflation last year. The price index accelerated growth from 3.0% to 3.3% in July. The core index accelerated from 4.1% to 4.2%— a turn upward from double the levels of the Fed's 2% target.
The conventional wisdom is that stronger-than-expected spending growth is good news for the dollar and (often) the stock market, demonstrating buyer confidence. For the dollar, that rule of thumb remains valid. But it could be bad news for the stocks, pressing down expectations that the Fed Funds rate has already peaked.
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The conventional wisdom is that stronger-than-expected spending growth is good news for the dollar and (often) the stock market, demonstrating buyer confidence. For the dollar, that rule of thumb remains valid. But it could be bad news for the stocks, pressing down expectations that the Fed Funds rate has already peaked.
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#WaveAnalysis #AMZN
Amazon reversed from support level 132.50
Likely to rise to resistance level 141.30
Amazon previously reversed up from the key support level 132.50 (former resistance from July) intersecting with the support trendline of the narrow up channel from March.
The support level 132.50 was further strengthened by the support trendline of the daily up channel from March and by the 61.8% Fibonacci correction of the upward impulse from July.
Given the clear daily uptrend, Amazon can be expected to rise further toward the next resistance level 141.30 (top of the previous correction 2).
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Amazon reversed from support level 132.50
Likely to rise to resistance level 141.30
Amazon previously reversed up from the key support level 132.50 (former resistance from July) intersecting with the support trendline of the narrow up channel from March.
The support level 132.50 was further strengthened by the support trendline of the daily up channel from March and by the 61.8% Fibonacci correction of the upward impulse from July.
Given the clear daily uptrend, Amazon can be expected to rise further toward the next resistance level 141.30 (top of the previous correction 2).
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#WaveAnalysis
#EURJPY reversed from resistance level 159.50
Likely to fall to support level 156.95
EURJPY currency pair recently reversed down from the key resistance level 159.50 (top of the previous minor impulse wave 1) intersecting with the upper daily Bollinger Band.
The downward reversal from the resistance level 159.50 is likely to form the daily Japanese candlesticks reversal pattern Bearish Engulfing.
Given the clear bearish divergence on the daily Stochastic indicator, EURJPY currency pair can be expected to fall further toward the next support level 156.95 (low of the previous wave 2).
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#EURJPY reversed from resistance level 159.50
Likely to fall to support level 156.95
EURJPY currency pair recently reversed down from the key resistance level 159.50 (top of the previous minor impulse wave 1) intersecting with the upper daily Bollinger Band.
The downward reversal from the resistance level 159.50 is likely to form the daily Japanese candlesticks reversal pattern Bearish Engulfing.
Given the clear bearish divergence on the daily Stochastic indicator, EURJPY currency pair can be expected to fall further toward the next support level 156.95 (low of the previous wave 2).
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#WaveAnalysis
#WTI crude oil rising inside impulse wave (3)
Likely to test resistance level 84.00
WTI crude oil continues to rise inside the intermediate impulse wave (3), which previously broke the daily down channel from the start of August (enclosing the earlier ABC correction (2)).
The breakout of this down channel strengthened the bullish pressure on WTI crude oil.
Given the strength of the active impulse wave (3), WTI crude oil can be expected to rise further toward the next resistance level 84.00 (which stopped the previous impulse wave (1)).
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#WTI crude oil rising inside impulse wave (3)
Likely to test resistance level 84.00
WTI crude oil continues to rise inside the intermediate impulse wave (3), which previously broke the daily down channel from the start of August (enclosing the earlier ABC correction (2)).
The breakout of this down channel strengthened the bullish pressure on WTI crude oil.
Given the strength of the active impulse wave (3), WTI crude oil can be expected to rise further toward the next resistance level 84.00 (which stopped the previous impulse wave (1)).
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The crypto market lost 3.5% in 24 hours, again falling below $1.05 trillion. The formal start of the sell-off was the news that the SEC had delayed its review of bitcoin ETF applications. The decline paused, anticipating further triggers, completely erasing Tuesday's upswing.
Bitcoin ended August down 11% at $26K, its worst performance since last November and the second consecutive month of declines. Technically, the recent pullback has confirmed that BTC's 200-day average is now acting as a resistance. According to the Fibonacci pattern, the potential downside target is the $21.3K area.
However, a drop to $24.7K also looks like an impressive short-term target for the bears.
September is considered the worst month of the year for BTC. Over the past 12 years, Bitcoin has only ended the month up three times and down nine times. The average decline was 13%, and the average gain was 11%.
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Bitcoin ended August down 11% at $26K, its worst performance since last November and the second consecutive month of declines. Technically, the recent pullback has confirmed that BTC's 200-day average is now acting as a resistance. According to the Fibonacci pattern, the potential downside target is the $21.3K area.
However, a drop to $24.7K also looks like an impressive short-term target for the bears.
September is considered the worst month of the year for BTC. Over the past 12 years, Bitcoin has only ended the month up three times and down nine times. The average decline was 13%, and the average gain was 11%.
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🔔Upcoming NFP @12:30 GMT with 169K new jobs expected. How do you expect USD to react?
Anonymous Poll
63%
UP ⬆️
37%
DOWN ⬇️
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#WaveAnalysis
#NZDUSD reversed from resistance level 0.6000
Likely to fall to support level 0.5900
NZDUSD currency pair recently reversed down from the strong round resistance level 0.6000 (former multi-month support from June), coinciding with the 20-day moving average and the 50% Fibonacci correction of the downward impulse from the start of August.
The downward reversal from the resistance level 0.6000 stopped the wave 4 of the active sharp downward impulse wave C from July.
Given the overriding daily downtrend, NZDUSD can be expected to fall further toward the next support level 0.5900 (low of the previous impulse wave 3).
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#NZDUSD reversed from resistance level 0.6000
Likely to fall to support level 0.5900
NZDUSD currency pair recently reversed down from the strong round resistance level 0.6000 (former multi-month support from June), coinciding with the 20-day moving average and the 50% Fibonacci correction of the downward impulse from the start of August.
The downward reversal from the resistance level 0.6000 stopped the wave 4 of the active sharp downward impulse wave C from July.
Given the overriding daily downtrend, NZDUSD can be expected to fall further toward the next support level 0.5900 (low of the previous impulse wave 3).
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#WaveAnalysis
#USDJPY reversed from support level 144.85
Likely to test resistance level 147.40
USDJPY currency pair recently reversed up from the support level 144.85 (former resistance from the end of June), intersecting with the 50% Fibonacci correction of the upward impulse from the start of August.
The upward reversal from the support level 144.85 continues the active impulse waves 3 and (3).
Given the strong daily uptrend, USDJPY can be expected to rise further toward the next resistance level 147.40 (previous monthly high from August).
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#USDJPY reversed from support level 144.85
Likely to test resistance level 147.40
USDJPY currency pair recently reversed up from the support level 144.85 (former resistance from the end of June), intersecting with the 50% Fibonacci correction of the upward impulse from the start of August.
The upward reversal from the support level 144.85 continues the active impulse waves 3 and (3).
Given the strong daily uptrend, USDJPY can be expected to rise further toward the next resistance level 147.40 (previous monthly high from August).
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#WaveAnalysis #TSLA
Tesla reversed from resistance level 260.00
Likely to fall to support level 240.00
Tesla recently reversed down from the resistance level 260.00 (former support level from the end of July), intersecting with the 50% Fibonacci correction of the downward impulse (1) from July.
The downward reversal from the resistance level 260.00 stopped the previous ABC correction (2).
Given the still overbought daily Stochastic, Tesla can be expected to fall further toward the next support level 240.00 (former top of the earlier wave A from August).
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Tesla reversed from resistance level 260.00
Likely to fall to support level 240.00
Tesla recently reversed down from the resistance level 260.00 (former support level from the end of July), intersecting with the 50% Fibonacci correction of the downward impulse (1) from July.
The downward reversal from the resistance level 260.00 stopped the previous ABC correction (2).
Given the still overbought daily Stochastic, Tesla can be expected to fall further toward the next support level 240.00 (former top of the earlier wave A from August).
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Crypto market capitalisation is almost the same level as a week ago - near 1.045 trillion. The Bitcoin pump and dump tickled the market with nerves, formally tied to events surrounding Grayscale's Bitcoin ETF fund.
#Bitcoin has been pegged at $26K for more than two weeks. An attempt to move back above the 200-day average has technically encountered stronger selling, confirming that the bears are not relinquishing market control. This disposition suggests higher risks that the consolidation will end with downside momentum, potentially at $25K or even $24K.
On #Ethereum's daily timeframes, a "death cross" has formed, with the 50-day moving average falling below the 200-day MA. Such a signal suggests a further decline, emphasising the bearish trend here. On the Bitcoin chart, such a pattern could form next week. But we also note that ETH already looks locally oversold.
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#Bitcoin has been pegged at $26K for more than two weeks. An attempt to move back above the 200-day average has technically encountered stronger selling, confirming that the bears are not relinquishing market control. This disposition suggests higher risks that the consolidation will end with downside momentum, potentially at $25K or even $24K.
On #Ethereum's daily timeframes, a "death cross" has formed, with the 50-day moving average falling below the 200-day MA. Such a signal suggests a further decline, emphasising the bearish trend here. On the Bitcoin chart, such a pattern could form next week. But we also note that ETH already looks locally oversold.
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Paradox: Jobs data supports USD but reduces odds of a rate hike
Friday's batch of US statistics boosted the Dollar, while the US stock market was mixed as a sell-off replaced an initial rally.
The data showed that the US economy created 187K jobs in August, but data for the previous two months showed a decline of 110K, painting a gloomier picture for the summer.
The unemployment rate rose from 3.5% to 3.8%—quite an unexpected jump given the steady rise in the employment rate. The increase was driven by a surge in the labour force participation rate from 62.6% to 62.8%. This is still below the pre-Cold War peak of 63.4%. It is even further from the peak of 67.1% in 2000.
People return to work as the stocks built up by the pandemic stimulus fade while fears of illness are receding. Inflation and high interest rates are encouraging people to look for work.
Friday's batch of US statistics boosted the Dollar, while the US stock market was mixed as a sell-off replaced an initial rally.
The data showed that the US economy created 187K jobs in August, but data for the previous two months showed a decline of 110K, painting a gloomier picture for the summer.
The unemployment rate rose from 3.5% to 3.8%—quite an unexpected jump given the steady rise in the employment rate. The increase was driven by a surge in the labour force participation rate from 62.6% to 62.8%. This is still below the pre-Cold War peak of 63.4%. It is even further from the peak of 67.1% in 2000.
People return to work as the stocks built up by the pandemic stimulus fade while fears of illness are receding. Inflation and high interest rates are encouraging people to look for work.
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It is also worth noting that the total number of hours worked in the private sector is virtually stagnant. The corresponding index was 115.5 in August (2007=100), not much higher than 115.1 in January. And labour cost growth has exceeded 2.75% over this period. This puts additional pressure on corporate profits.
Wage growth has slowed. Over the month, average hourly earnings rose by 0.2%, compared with 0.4% m/m in the previous two months. The annualised growth rate fell to 4.3%, weaker than the 4.4% expected and recorded in June and July.
Wage growth has slowed. Over the month, average hourly earnings rose by 0.2%, compared with 0.4% m/m in the previous two months. The annualised growth rate fell to 4.3%, weaker than the 4.4% expected and recorded in June and July.
Some commentators point to the rise in the unemployment rate as an argument for the Fed not to raise rates again this cycle. This is supported by the FedWatch tool, which puts the probability of a November hike at 38%, down from 62.3% a week earlier.
On the other hand, we focus on the still solid inflationary trend in wages at the expense of the swelling service sector, which feeds the inflationary spiral. The Fed may decide not to raise rates any further, but it will keep them on hold for much longer than market participants currently expect, which will dampen economic activity, support a rising dollar and weigh on the equity market.
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On the other hand, we focus on the still solid inflationary trend in wages at the expense of the swelling service sector, which feeds the inflationary spiral. The Fed may decide not to raise rates any further, but it will keep them on hold for much longer than market participants currently expect, which will dampen economic activity, support a rising dollar and weigh on the equity market.
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#WaveAnalysis
#CADJPY reversed from support level 106.75
Likely to rise to resistance level 108.00
CADJPY currency pair recently reversed up from the key support level 106.75 (which stopped the previous waves A and (2)), coinciding with the lower daily Bollinger Band and the 38.2% Fibonacci correction of the upward impulse from the end of July.
The upward reversal from the support level 106.75 continues the active intermediate impulse wave (3) from the middle of August.
Given the clear daily uptrend and the strong yen sales, CADJPY can be expected to rise further toward the next resistance level 108.00 (top of the previous waves (1) and B).
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#CADJPY reversed from support level 106.75
Likely to rise to resistance level 108.00
CADJPY currency pair recently reversed up from the key support level 106.75 (which stopped the previous waves A and (2)), coinciding with the lower daily Bollinger Band and the 38.2% Fibonacci correction of the upward impulse from the end of July.
The upward reversal from the support level 106.75 continues the active intermediate impulse wave (3) from the middle of August.
Given the clear daily uptrend and the strong yen sales, CADJPY can be expected to rise further toward the next resistance level 108.00 (top of the previous waves (1) and B).
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