Crude Oil fell to a 3-month
low as the market focus switched from the geopolitical risk in the Middle East
to the macro risk of a recession as the PMIs of major economies continue to
contract and the US labour market data started to show more clear weakness. If
we don’t get any bigger escalation in the Middle East that could threaten to
disrupt supply, Crude Oil is likely to reach even lower price as while the
global economy continues to weaken.

WTI Crude Oil
Technical Analysis – Daily Timeframe

On the daily chart, we can see that Crude Oil fell
back into the range between the $83 resistance and $64
support. The bias has turned bearish again following this technical break below
the $83 level and the weakening US labour market data. The price is now around
the swing level at $78 and from a risk management perspective, the sellers
would have a much better risk to reward setup if the price pulled back into the
resistance where we can find the confluence with the
trendline, the red
21 moving average and the
50% Fibonacci retracement level.

WTI Crude Oil Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that Crude Oil has
been selling off with almost no pullback since Monday. The buyers are likely to
step in around this swing level to target a pullback into the minor trendline
around $80 level where we can also find the 50% Fibonacci retracement level and
the red 21 moving average for confluence. That’s where the sellers are likely
to pile in with a defined risk above the trendline to position for a drop below
the $78 level with a better risk to reward setup.

WTI Crude Oil Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we
have another minor trendline defining the current bearish momentum. A break
above this trendline should trigger more buying pressure and probably lead to
the pullback into the $80 level. The sellers might even lean on this trendline
with the red 21 moving average for confluence, but the risk to reward would be
much worse.

Upcoming Events

This week is pretty empty on the data front with just
the US Jobless Claims tomorrow and the University of Michigan Consumer
Sentiment on Friday being the only notable events. The market is likely to
focus on the US Jobless Claims given the recent weakness in the labour market
data. Strong readings are likely to support Crude Oil, while weak figures may
add even more pressure as the recessionary trade is likely to gather steam.

This article was written by FL Contributors at www.forexlive.com.

ECB’s Nagel dismisses rate-cut talk, calls inflation ‚greedy beast‘

It is far too early to talk about cutting the European Central Bank’s interest rates as inflation is a „very greedy beast“ that is hard to beat, ECB policymaker Joachim Nagel said on Wednesday.

• „This discussion (on when interest rates can be cut) is not helpful… it is much, much too early,“ he told an event in London. „Inflation is a greedy beast, a very greedy beast,“
• „When we have to deal with a beast that is so stubborn, we have to be even more stubborn.“

This article was written by Ryan Paisey at www.forexlive.com.

The Newsquak US Market Open:

Equities in the red, USD bid & GBP lags as Gilts extend gain; Fed’s Powell due

• European bourses post modest losses whilst the NQ & ES teeter around the unchanged mark, RTY lags slightly.
• Bonds extended gains with Gilts outpacing counterparts though ultimately fell short of 96.00 level, with the complex now off best levels & USTs lower.
• USD bid with the index printing a 105.87 high, putting downward pressure on G10 peers; GBP bearing the brunt & largely attributed to outperformance in Gilts.
• Crude continues to crumble but has lifted from lows most recently amid a magnitude 5 earthquake in western Texas
• Looking ahead, highlights include US Wholesale Prices, NBP Policy Announcement; BoC Minutes, Speeches from Fed’s Powell, Williams, Barr & Jefferson; BoE’s Bailey; Supply from US. Earnings: Telecom Italia, Ralph Lauren, Kellogg, Disney, BlackRock, Warner Bros Discovery & Disney.

This article was written by Ryan Paisey at www.forexlive.com.

ECB policymakers keen to cool euphoria over inflation drop

FULL STORY

The European Central Bank needs to see further progress in
dampening inflationary pressures, and companies along with governments need to
chip in to prevent more policy tightening, ECB policymakers said on Wednesday.

Policymakers speaking at various venues across Europe
appeared keen to cool any euphoria about the rapid fall in prices, arguing that
the overall picture was more mixed. Some policymakers even argued that further
rate hikes should not be taken off the table.

• „You do see some progress (in underlying inflation),
  but not yet enough,“ ECB chief economist Philip Lane said in Riga
• „The ‚last mile‘ before we reach our inflation target
  may well be the hardest,“ Nagel said in London.
• „It is far, far too early in my view to start talking
  about whether we need to start reducing or cutting rates… And also it is too
  early to declare that we have reached the top of the ladder“ of interest
  rate hikes, Makhlouf said in Dublin.

This article was written by Ryan Paisey at www.forexlive.com.

Swiss respond to removal from US currency manipulation list

FULL STORY

The Swiss National Bank responded on Wednesday to the U.S. Treasury removing Switzerland from its monitoring list of countries that appeared to be manipulating their currencies.

Switzerland had run into trouble with the U.S. after the SNB’s massive purchase of foreign currencies, designed to weaken the safe haven franc as it surged in value.

The SNB has since changed course, allowing the franc to weaken as a tool to dampen imported inflation.

This article was written by Ryan Paisey at www.forexlive.com.