Brent crude oil trades higher today off the back of declining oil stock figures, the upcoming OPEC+ meeting and the overall boost to the energy sector resulting from Putin’s announcement to “unfriendly nations” that future gas purchases are to be paid for in Russian Rubles.
Yesterday, the Energy Information Agency (EIA) published its latest weekly petroleum status report, which covers data up until the 18th of March. Most notably, crude oil stocks witnessed a massive decline of 2.508 million barrels when stocks were forecast to see an increase of 0.114 million. US crude oil inventories currently stands at 413.4 million barrels and is 13% below the 5-year average for this time of the year.
Oil traders now turn their attention to the OPEC+ meeting on March the 31st where the group will discuss their output target for May. It is largely expected that the existing agreement to increase oil output by 400,000 barrels per day will go ahead as planned as this has been the case in previous meetings.

Recent meetings have been uncharacteristically brief in duration but this month’s agenda may require greater engagement amid large scale sanctions of Russian oil imports. OPEC+ has previously stated that the large price spikes should not be attributed to OPEC’s policies but is rather the result of fears of supply shortages.

UKOil D1 03 24 2022 1407


Brent Crude oil prices pulled back extensively after reaching the recent high of around $139. A bounce off the 50 simple moving average along with the appearance of a morning star candle stick pattern lead the way for a bullish continuation.  A retest of $139 remains constructive above $113. Failure to trade above $113, opens the door to 97.20 as the next level of support.

 

 

 

 

U.S. equities have put in a massive rally after the Fed hiked rates last week. And this was a ‘famine to feast’ kind of mood as the Nasdaq 100 had hit a fresh 10-month low just last Tuesday. Sellers even seemed aggressive around the initial statement of the FOMC hiking rates. But when the press conference started 30 minutes later, stocks began to bounce and that bounce hasn’t really quieted until last night. That rally accumulated as much as 13.56% in the Nasdaq 100  in one week.  There’s a large zone of support sitting underneath both the Nasdaq 100 and S&P 500 price action that, if bulls respond to, the door very much remains open for topside continuation. This has been the most extreme of the three U.S. indices so I wanted to touch on this first. The rally pushed 13.5% at it’s peak and as of right now, prices are around 12.4% above the Tuesday low. 

NAS100 D1 03 23 2022 1755

The Nasdaq 100 set a fresh monthly high along the way while breaking through a number of key resistance levels, many of which now become potential support.

The big zone of interest in the Nasdaq 100 spans between two  levels at 14,500 and 14,375. This zone came into play last October as support and it quickly came back into the picture this year as resistance in late-January, support in early-February and then resistance again in mid-March.

But, this zone was only able to stall the advance ahead of last week’s close, and bulls have run right through that zone to continue the trend this week. This becomes a massive spot of importance for the rally as it will help us to see just how aggressive buyers remain to be. And from that, we can begin to gauge just how aggressive we should be in response.

A hold in this zone today keeps the door open for bullish continuation scenarios. If the zone doesn’t hold, there’s another possible spot of support around 14,183. For near-term resistance, the 14,669 level remains important, after which 14,816 and 14,993 come into view.

 

 

 

 

The EUR/USD is coming off stiff resistance right around 11121 . It was first support in January and again very short-term support on Feb 24 before turning into resistance twice in the last week. Weakness is bringing into play short-term support via a trend-line off the recent low. In total, the recent price action is beginning to carve out an ascending wedge at resistance. And with this taking shape within the context of a broader downtrend it would suggest that recent strength is nothing more than a corrective bounce before another leg lower. But even if the wedge does come to fruition and/or the trend-line off the low breaks, there is one caveat to the trend continuation scenario. There are a pair of major long-term trend-lines in the area. One is from 2001, which actually has been breached a bit and is in the middle of current price action.

EURUSD D1 03 18 2022 1727

The other is a line off the 2016 low that marks the exact low we just saw last week. This is the line of primary focus on this end, as it is the lower of the two thresholds and has held with such precision. From a macro tech perspective, as long as price stays above then the outlook is neutral at worst. Break below, and things could really start to get interesting on the downside.
Before getting ahead of ourselves on the bigger levels/lines, the trend-line off last week’s low and the possibility of a wedge forming is the primary focus for now. Should it lead to a downside break, then we will see how price behaves at 10806. If we see the wedge lead to a breakout above resistance (11137 max threshold), then we could see EUR/USD squeeze higher with some force.

 

 

 

 

The latest, hawkish, comments from Fed chair Jerome Powell suggest that the Federal Reserve is open to raising interest rates in 50 basis point clips if needed to try and counter red-hot US inflation. Chair Powell remark yesterday that if the Fed thinks that it is ‘appropriate to raise (by 50 basis points) at a meeting.

The single currency remains under pressure with higher energy prices boosting inflation and weighing on growth. In his latest speech, ECB Vice-President Luis de Guindos said that while inflation is expected to remain high ‘for a longer period’ he sees no stagflation as ‘even in our most adverse scenario for the current year, we still foresee growth of more than 2%. 

EURUSD D1 03 22 2022 1408
EUR/USD is trading on either side of 1.1000 with any move higher being pared back. Last Thursday’s 1.1138 high print is unlikely to come under pressure in the short term, while the recent run of higher lows has been broken convincingly. The longer-term run of lower highs and lower lows remains intact and the pair is now testing the 20-day simple moving average. If this turns indicator turns into resistance, it is likely that bears will push for 1.0900 and the recent two-year low at 1.0879.

 

 

The S&P 500 index broke out of the descending wedge formation, which is typically a bullish pattern. Yesterday price action broke above the upper trendline of the wedge pattern and appears to be heading back towards the trendline, now as support. A continued pullback may find support around the descending trendline before attempting a confirmed breakout from the wedge with continued momentum. 4420 and 4584 are the nearest relevant levels of resistance.

The 50 and 200 day simple moving averages have recently crossed, creating a ‘death cross’  a bearish indication. Therefore, the possibility of another false breakout remains in play. The next level of support appears at 4120 followed by 4100. 

SPX500 D1 03 17 2022 1600

 

Trade accordingly with your risk

 

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