Crude Oil, USD, Gold, Treasuries, Federal Reserve, FOMC, CAD, NOK – Talking Points
- Crude oil It continued to decline on concern of a slowing US economy
- US banks remain in focus with some regional names under the pump
- All eyes are on the Fed today. If their language was hardcore, would West Texas swamp Mean?
Recommended by Daniel McCarthy
How to trade oil
Crude Oil fell in the North American session yesterday but has so far stabilized through Asian trade with the US dollar broadly weaker into Wednesday.
The WTI futures contract remains below $72 while the Brent contract is at $75.
Risky assets came out in favor while gold and Treasuries rose as the mood prevailed amid fears that more US banks could have weak balance sheets.
Recession fears seem to be stagnating after weak US jobs and factory orders data ahead of the Federal Reserve’s interest rate decision later today.
Gold is looking at $2.020% an ounce while the 2-year Treasury benchmark yield is back under 4%.
Regional banks bore the brunt of the problems with PacWest Bancorp and Western Alliance Bancorp finishing -27.8% and 15.1% respectively.
The Dow Jones, S&P 500, and Nasdaq all saw losses of more than 1% in the cash session, but are flat so far today.
Following the lead of Wall Street, all equity markets in the Asia-Pacific region open today fell. Mainland China and Japan vacation among other countries.
Sentiment was further undermined by activist investor Hindenburg, which released a report questioning the financial integrity of Icahn Enterprises which caused its share price to drop 20%.
After notable declines in the oil-related Canadian dollar and Norwegian krone yesterday, all of the G10 currencies are firmer to varying degrees against the US dollar today.
The Federal Reserve will be in center stage today, but the full economic calendar can be viewed here.
Trade Smart – Subscribe to the DailyFX newsletter
Receive timely and compelling market commentary from the DailyFX team
Subscribe to the newsletter
Technical analysis of WTI Crude Oil
After filling the gap created by the OPEC+ production cut announcement, WTI continued to decline. The price is below the simple moving averages (SMA) of all periods which may indicate that bearish momentum is developing.
Support could be at the 78.6% Fibonacci retracement of the move from 64.36 to 83.53 at 68.46. Moreover, support may lie at the previous lows
On the upside, resistance could be at nearby breakout points in the area of 72.25 – 72.46, the advance of 73.93.
– By Daniel McCarthy, Strategist for DailyFX.com
Please contact Daniel via @employee on Twitter