Time Table
The price of crude oil received a boost this morning, because of the number China Manufacturing PMI which was released over the weekend. The latest official figures PMI beat analysts' estimates, suggesting that fears of a continued slowdown in China may be too exaggerated. Fears that the official figures are "too optimistic" were unfounded as private investigations conducted by HSBC / Markit managed to beat estimates as well. However, the pace of growth is slightly lower compared to the previous month, in contrast to official figures that correspond to the numbers in October, that takes the shine off this upward impression.
This can be part of the reason prices remained below the resistance at 93.25, although risk appetite was strong during the hours from Asia. The non-violation 93.25 opens a move back to 92.0+ levels, and currently the price is testing 93.0 round number (and flexible support), with an expected bearish acceleration if the level is broken.
stochastic readings suggest that the bullish momentum is not fully over yet Stoch with a distance curve in the overbought region. However, since the previous peaks were seen around 70.0, it will not be too surprising if the reverse curve Stoch lower from here and add as a confirmation to the downward thrust to 92.0.
Table Daily
Graph Daily supports the bearish outlook, with prices face not only the 93.25 resistance, but also a pressure further downward descendant of Top Channel. However, in the short term chart difference where a downward movement is already visible, there is no evidence that the bullish momentum (or bullish resumption of November 29) is complete. Stochastic is in agreement with the curve Stoch grown over the "resistance" of 30.0. Nevertheless, the overall downward pressure is immense, and the curve will delete Stoch above 50.0 level before real bullish momentum may be considered. Similarly, even if the price manages to push above the top channel, price ideally should erase resistance above 95.0 before long-term upward correction may be considered.
This notion is also supported by Fundamentals. The production of the United States is increasing and the country should support the title of world's largest producer by the end of 2015. recent nuclear agreement with Iran also cooled the turmoil in the Middle East, resulting in less speculative game in the oil because of fear. With global demand falling (as evidenced by the slowdown in OPEC output - to keep them lifted prices) is expected WTI Crude prices continue to decline in 2013 and well into 2014.
This does not give carte blanche to the bears, however, keep in mind that in a long term perspective, the dynamics of the recovery is still in play. in addition, it seems that the bulls do not go down without putting up a fight - see the sudden rise in WTI prices last Friday which was not triggered by fundamental news releases. Hence traders should certainly be wary and do not automatically assume it will be a smooth journey south from here
Links :.
USD / JPY - BOJ Kuroda unfazed by low capital expenditure
Gold Technicals - Sideshifts With Bumpy week ahead
AUD / USD - found strong support at 0.91
This article is only for general information purposes. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or its subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
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