JUN
12
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WTI records small gains, settles above $66

After recording a $2 drop and closing the previous week above the $65 handle, the barrel of West Texas Intermediate started the new week in a quiet way and edged lower toward $65 before making a recovery in the NA session. As of writing, in the post-settlement trade, the barrel of WTI is trading at $66.10, adding 30 cents, or 0.5%, on the day.

Today's headlines failed to dissipate the uncertainty surrounding a possible OPEC supply hike. "Last week, we saw some news stories indicating that the Trump administration had asked OPEC to increase oil production. But the week went out and we saw those stories walk back. And now we're seeing a number of OPEC producers who are in favor of the status quo," Andrew Lipow, president of Lipow and Associates in Houston, told Reuters.

Commenting on rumors of the US administration asking for an output hike, Suhail Al Mazrouei, the current head of OPEC and energy minister of the United Arab Emirates, said that they haven't received any official or unofficial communication on that issue.

On the other hand, earlier today in a published statement, Iraq's Oil Minister Jabar al-Luaibi said that oil market still needed support and stability and argued that the market's higher supply could cause a big harm to the global markets. 

Ahead of the important meeting on June 22, OPEC headlines are likely to continue to dominate crude oil's price action. Later this week, inventory data from the United States will also be followed closely especially following last week's surprise increase.

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JUN
12
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EUR/JPY Technical Analysis: Consolidates after 100-pip gain as EUR/JPY fails to break above last week’s high

EUR/JPY gained about 100 pips on Monday but bulls ran out of steam as they couldn’t break above last week’s high and the 130.00 level.EUR/JPY bulls were also capped by the 200-period simple moving average (4-hour) and the descending trendline from April 24. Although the short-term momentum is bullish a failure to break above last week’s high at 130.29 could lead to a triangle consolidation.However, a strong bull breakout above 130.29 would likely lift EUR/JPY towards the 131.00 figure.

EUR/JPY 15-minute chart

Spot rate:                      129.68Relative change:           0.06%     High:                             130.07Low:                              128.68

Trend:                           Bullish on a break above 130.29 (last week’s high)

Resistance 1:               130.29 last week’s highResistance 2:               130.58 daily 50-period SMAResistance 3:               131.00 figure

Support 1:                    129.30 supply/demand levelSupport 2:                    128.68 current Monday’s lowSupport 3:                    128.11 last Friday’s swing low

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JUN
12
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Iraq OilMin: Will decide on oil output increase if OPEC take such a course at June meeting

Iraqi oil minister Jabar al-Luaibi crossed the newswires in the last hour explaining that they would decide whether or not they would increase their output if OPEC decides to ramp up production at the June 22 meeting. 

al-Luaibi further added that their current output at around 4.325 million barrels per day was within the OPEC limit and he was expecting a tough meeting in June. 

As of writing, the price of the barrel of West Texas Intermediate was $66.05, up 30 cents on the day.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

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JUN
12
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Global market wrap: becalmed despite G7 discord - ANZ

Analysts at ANZ explained that ahead of a major week for central bank meetings, key data releases and the US-North Korea Summit today, financial markets were becalmed despite the G7 discord post last Saturday’s communique. 

Key Quotes:

"Trade uncertainty remains a major concern, but markets had a risk on tone. That may have been a function of low volumes ahead of the Fed and ECB this week as asset allocators are unlikely to make strategic investment decisions until those events and the Singapore Summit are out of the way."

"The Fed is expected to raise rates 25bps and indicate one more rate rise this year."

"The ECB is expected to acknowledge the recent soft patch in growth but nonetheless signal that QE should end in Q4, a decision that is underpinned by an improving underlying inflation performance (services inflation has risen steadily to 1.6% y/y vs 1.2% in January)."

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JUN
12
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Gold rises but remains in a range, around $1300

Gold post modest gains but continues limited above $1300.Technical outlook shows some bullish momentum but not strong enough.Key events ahead: Tump-Kim Jong Un meeting, US CPI and FOMC.

The yellew metal opened the week posting marginal gains. It benefit from a retreat of the US dollar during the second half of the day. Gold bottomed at $1,294/oz and then bounced to the upside. It peaked on US hours at $1,302, the highest since Thursday and pulled back to end the session hovering around $1,300.

Limited by $1300

It continues to move sideways, unable to consolidate firmly above $1,300 while the downside remains capped around $1,295. The tone favors modestly the uspdie.

The metal needs to post a daily close well above $1,300 (also the 20-day moving average) in order to clear the way to more gains. A consolidation on top of $1,300 would improve significantly the short-term technical outlook signaling a more significant bullish correction and that temporal bottom at $1,281 is in place.

If it continues to be unable to break and hold on top of $1,300 the tone would favor a continuation of sideways moves around $1,290/$1,305. A close below $1,290 would expose May lows at $1,282.

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JUN
12
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JPY: staying long into risk-laden week - TDS

Analysts at TD Securities are staling ling of the yen into this risk-laden week.

Key Quotes:

"With the Fed set to deliver a widely expected rate hike and the ECB to have a more fruitful discussion about its QE policy, the BoJ will be happy to skirt the limelight this week. Little changes should be expected overall."

"The BoJ bought itself more flexibility in April. While the removal of the 2% inflation timeline means a steady-as-she-goes course of policy, it gives the BoJ leeway to tweak YCC when there is enough evidence of price persistence - likely as the ECB nears or completes QE. Despite the recent slowdown, underlying CPI should be supported thanks to a solidly positive output gap, which feed through with a lag."

"The recent USD uptrend has nearly matured as markets appear to move away from "divergence". This, along with a number of medium-term factors may challenge USD/JPY's beta to UST yields, but leave the JPY conflicted on crosses (EURJPY most notably)."

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JUN
12
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GBP/JPY goes into consolidation above 147

GBP/JPY encounters resistance ahead of 148 on Monday.The UK data shows that the economy continues to weaken.

Earlier today, a relatively high risk appetite weighed on the safe-haven JPY and allowed the GBP/JPY to pair to rise toward the 148 handle. However, the disappointing macroeconomic data releases from the UK triggered a GBP sell-off and forced the pair to erase a majority of its daily gains. After easing below the 147 mark following the initial reaction, the pair went into a consolidation phase and was last seen trading at 147.20, where it was up 0.18% on the day.

The data from the UK showed that the manufacturing and industrial production both contracted on a monthly basis in April to miss the experts' estimate of modest expansions. On the other hand, the GDP estimate released by the NIESR showed that the expectation of a 3-month economic growth to May fell short of the market consensus of 0.3% with 0.2%. According to the report, the data showed that the economic growth has slowed materially since the start of this year and it continues to remain weak.

In addition to these disappointing figures, uncertainty surrounding Brexit negotiations continue to keep investors away from the GBP. "In back-to-back sessions on Tuesday and Wednesday afternoons this week, the UK House of Commons will undertake a series of debates and votes on amendments made by the House of Lords to the European Union (Withdrawal) Bill," TD Securities analysts noted in a recently published report.

Technical outlook

The immediate resistance for the pair could be seen at 148.10 (Jun. 7 high) ahead of 149.20 (May 9 high) and 150 (psychological level/May 18 high). On the downside, supports are located at 146.70 (Jun. 11 low), 146 (psychological level/Jun. 8 low) and 145.30 (May 25 low).

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JUN
12
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FOMC to raise actual and projected rate - Standard Chartered

According to analyst at Standard Chartered, the Federal Reserve is likely to raise the policy rate while they expect the rate dot plot to reflect four hikes in 2018.

Key Quotes:

“We expect the FOMC to increase the fed funds target range (FFTR) by another 25bps to 1.75-2.00% on 13 June, and adjust the interest rate on excess reserves (IOER) to 5bps below the upper bound of the FFTR.”

“We believe the median projected FFTR for 2018 will also rise (we expect an increase to 2.3%). Changes to the 2019 median remain a risk, although such changes face a higher hurdle than for 2018.”

“We believe a steeper FFTR path and a downgrade to cyclical unemployment rate is the most likely outcome.”

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JUN
12
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NAFTA: Longer negotiations could weaken Canadian position - NBF

According to analysts at the National Bank of Canadat he longer the negotiations about NAFTA continue, the weaker Canada’s negotiating position could become.

Key Quotes:

“Notwithstanding the war of words that broke out between the Canadian and U.S. leaders in the aftermath of the G-7 leaders’ summit, we still believe that U.S. President Donald Trump will not seek to shred NAFTA.”

“The political blowback from states (including those that voted for him), businesses and Congress (members from both sides of the aisle) could overwhelm his administration. What’s more, a months-long legal battle would inevitably ensue over whether the President has the authority to formally terminate NAFTA without congressional approval.”

“From this perspective, the U.S. tariffs on aluminum and steel imports can be seen as an attempt to create uncertainty in order to extract further trade concessions.”

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JUN
12
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IMF's Lagarde: Cloud over global economy have become darker, especially since weekend

The International Monetary Fund (IMF) Managing Director Christine Lagarde has recently delivered a joint statement with the WTO Chief Azevedo and Germany's Merkel. Lagarde said that the cloud over the global economy, especially since the G7 summit that took place last weekend, had become darker and added that the business confidence was declining due to trade-interrupting measures taken by major economies, as reported by Reuters.

WTI Chief stated that they had to stop this escalation of trade tensions and tit-for-tat exchanges would not be helpful.

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

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