Oil prices are pacing higher on Tuesday through Asia-Pacific trading as energy prices extend gains from April amid supply concerns stemming from Russian products. The European Union (EU) is reportedly drafting an embargo on Russian oil exports. Hungary and Slovakia, two members highly dependent on that oil, would likely be given an exemption under the embargo. That would help ease some supply pressures in Europe overall, but the net impact would likely push oil prices higher.

The European embargo is also likely to be a phased approach, allowing EU members additional time to ween themselves off Russian energy. Germany’s economy ministry reported that its Russian oil imports have already been scaled back substantially. The sanctions package is due to be distributed among bloc members on Wednesday. Oil prices may react to the upside or downside, depending on how aggressive the action plan is.
Those supply-side issues would likely be having a larger impact on prices were it not for ebbing demand elsewhere. The United States saw its factory activity fall for a second month in April, according to the Institute for Supply Management’s purchasing managers’ index (PMI). That PMI gauge, released overnight, fell to 55.4, matching the September 2020 low.

USOil D1 05 03 2022 1223
Prices are currently riding above the 50-day Simple Moving Average (SMA) as a supportive trendline from December helps to underpin the broader rally. Bears have attempted several breaks below that trendline but have so far failed to score a decisive move lower. That said, holding above the trendline will likely remain key. A break lower would open the door for prices to test the 100-day SMA.

 

 

 

 

The CAD/JPY pair attempts to rebound as the Japanese Yen futures drop in the short term. However, the bounce-back could be only a temporary one as the bias is bearish.

Technically, the pair may test the immediate resistance levels before resuming its downside movement. The pair is trading at 99.85 at the time of writing. After its massive drop, minor growth was natural. However, the rebound could bring new short opportunities.
The Bank of Japan is expected to keep its monetary policy unchanged tomorrow. The BOJ Policy Rate publication, Monetary policy Statement BOJ Outlook Report and the BOJ Press Conference could bring high volatility and sharp movements. 

CADJPY D1 04 27 2022 1654

From the technical point of view, as long as it stays under the downtrend line, the CAD/JPY pair could resume its downside movement despite temporary rebounds. A new lower low, making a valid breakdown below the pitchfork’s lower median line, could announce more declines.

 

 

 

 

 

NZD/USD trades below the 50-Day SMA (0.6817) for the first time since February after failing to defend the bullish trend from earlier this year, and the exchange rate may face a further decline over the remainder of the month as it struggles to push back above the moving average.

In turn, the rebound from the monthly low (0.6715) may continue to unravel as NZD/USD fails to extend the series of higher highs and lows from earlier this week, with recent developments in the Relative Strength Index (RSI) casting a bearish outlook as the oscillator establishes a downward trend.

NZDUSD D1 04 22 2022 1135

 

Keep in mind, NZD/USD cleared the opening range for 2022 in March, with the 50-Day SMA (0.6817) establishing a positive slope as the exchange rate traded to a fresh yearly high (0.7034) earlier this month.

However, NZD/USD trades below the 50-Day SMA for the first time since February after failing to defend the bullish trend from earlier this year, with the exchange rate giving back the advance from the monthly low (0.6715) as it struggles to push back above the moving average.

A break/close below 0.6690 brings the 0.6630 area on the radar, with the next region of interest coming in around 0.6570 

 

 

 

The rise in real yields is a concern for gold and one which makes  hard to get bullish on the precious metal. Now admittedly, lower gold prices has not initially been the case given the failed test at 2000. With gold below 1915, this now represents resistance, while key support is situated at 1880. Until 1880 is broken, technically, gold is neutral. 

XAUUSD D1 04 26 2022 1650

 

 

The DAX 40 has held up despite German energy supply from Russia coming under further scrutiny. The finance minister appears to be a logger heads with the foreign minister over the timing of withdrawing dependence on the Eastern source.

GER30 D1 04 21 2022 1417

The DAX has continued to consolidate with a 13897 – 14945 range.
This consolidation has seen volatility decrease as illustrated by the narrowing of the 21-day simple moving average (SMA)
Support might be provided at the recent lows of 13897, 13270 and 12425. On the topside, resistance could be offered at the prior peaks of 14945, 15535 and 15731.

 

 

 

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