This article was written by Arno V Venter at www.forexlive.com.
Personally I think it’ll be a very hard sell to the doves to argue against a cut after the recent batch of inflation and PMI data.
Yes, PMI data has been unreliable, but the trend has been clear.
This article was written by Arno V Venter at www.forexlive.com.
Crude oil rallied strongly last
week following the tensions in the Middle East between Israel and Iran. We also
got some key technical breakouts that increased the bullish momentum.
Last Friday, we also got a strong US NFP report which cast aside recessionary fears and strengthened the case for a future pick up in activity amid the Fed’s easing.
In the big picture, central
bank easing generally leads the manufacturing cycle, so we can expect global
growth to pick up, especially after the Fed’s 50 bps cut and the Chinese
officials surprising with strong easing measures.
All these reasons should be
bullish for the market and support prices in the next months barring a
recession. As a reminder, positioning in crude oil is still near record lows.
Crude Oil
Technical Analysis – Daily Timeframe
On the daily chart, we can
see that crude oil broke above the major trendline and extended the gains into new
highs as the bullish momentum increased. The target for the buyers should now
be the 80 handle where we can expect the sellers to step in to position for a
drop back into the 70s.
Crude Oil Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can
see that we now have a minor upward trendline defining the current bullish
momentum. If the price were to pull back, we can expect the buyers to lean on
the trendline to position for new highs, while the sellers will look for a
break lower to position for a drop back into the 72 handle.
Crude Oil Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, we can
see that we have the upper bound of the average daily range for today standing right around the
key 77.50 swing level. If the price extends into the swing level we can expect the
sellers to step in for a pullback into the minor trendline, while the buyers
will likely continue to lean on the trendline to keep targeting new highs.
Upcoming
Catalysts
This week the calendar is a bit empty on the data front. The main events are all
scheduled for the latter part of the week. On Thursday, we have the US CPI and
the US Jobless Claims. On Friday, we conclude with the US PPI and the
University of Michigan Consumer Sentiment report.
This article was written by Giuseppe Dellamotta at www.forexlive.com.
Chinese equities have been an a rip since the country came out with their new stimulus plans, and there has been numerous articles of big players rushing in and desperately trying to get some China exposure.
The HK50 below is up nearly 40% since the September lows. Amazing moves.
However, China was away last week for bank holidays, and with China back tomorrow there will be a keen to see how equities trade after the bank holidays.
At some stage markets will take a breather as it usually does, but I’m not in the mood to guess when that will happen, especially not when momentum is this strong.
One to keep an eye on this week though.
This article was written by Arno V Venter at www.forexlive.com.
Tuesday
The Japanese
Average Cash Earnings Y/Y is expected at 3.1% vs. 3.6% prior. Wage growth has
turned positive lately in Japan and that’s something the BoJ always wanted to
see to meet their inflation target sustainably. The data shouldn’t change much for the
central bank for now as they want to wait some more to assess the developments
in prices and financial markets following the August rout.
Wednesday
The RBNZ is
expected to cut the OCR by 50 bps and bring it to 4.75%. The reason for such
expectations come from the unemployment rate being at the highest level in 3
years, the core inflation rate being inside the target range and high frequency
data continuing to show weakness. Moreover, Governor Orr in the last press
conference said that they considered a range of moves in the last policy
decision and that included a 50 bps cut.
Thursday
The US CPI Y/Y is
expected at 2.3% vs. 2.5% prior, while the M/M figure is seen at 0.1% vs. 0.2%
prior. The Core CPI Y/Y is expected at 3.2% vs. 3.2% prior, while the M/M
reading is seen at 0.2% vs. 0.3% prior.
The last US labour
market report came out much better than expected and the market’s pricing for a
50 bps cut in November evaporated quickly. The market is now finally in line
with the Fed’s projection of 50 bps of easing by year-end.
Fed’s Waller
mentioned that they could go faster on rate cuts if the labour market data
worsened, or if the inflation data continued to come in softer than everybody
expected. He also added that a fresh pickup in inflation could also cause the
Fed to pause its cutting.
Given the recent
NFP report, even if the CPI misses slightly, I don’t think they would consider
a 50 bps cut in November anyway. That could be a debate for the December
meeting if inflation data continues to come below expectations.
The US Jobless
Claims continues to be one of the most important releases to follow every week
as it’s a timelier indicator on the state of the labour market.
Initial Claims
remain inside the 200K-260K range created since 2022, while Continuing Claims
after rising sustainably during the summer improved considerably in the last
weeks.
This week Initial
Claims are expected at 230K vs. 225K prior, while there’s no consensus for
Continuing Claims at the time of writing although the prior release showed a
decrease to 1826K.
Friday
The Canadian
Labour Market report is expected to show 28K jobs added in September vs. 22.1K
in August and the Unemployment Rate to increase to 6.7% vs. 6.6% prior. The
market is pricing an 83% probability for a 25 bps cut at the upcoming meeting
but since inflation continues to surprise to the downside, a weak report will
likely raise the chances for a 50 bps cut.
The US PPI Y/Y is
expected at 1.6% vs. 1.7% prior, while the M/M figures is seen at 0.1% vs. 0.2%
prior. The Core PPI Y/Y is expected at 2.7% vs. 2.4% prior, while the M/M
reading is seen at 0.2% vs. 0.3% prior.
Again, the data is
unlikely to get the Fed to debate a 50 bps cut at the November meeting even if
it misses. The risk now is for inflation to get stuck at a higher level or even surprise to the upside.
This article was written by Giuseppe Dellamotta at www.forexlive.com.
Hello traders and investors! This is Itai Levitan, an experienced market analyst at ForexLive.com, tracking crude oil for you today as well as what I am looking at. Let’s dive into the insights you need to make informed trading decisions. 🌊
Recent Rally Highlights 🚀
Strong Uptrend: Crude oil prices have surged by approximately 14% in less than four days, which signals significant bullish momentum. This sharp rally reflects market dynamics, particularly supply constraints, Iran’s ballistic missile attack on Israel (will there be an Israel response on Iran?) and heightened demand.
Personal Experience Tip: I see a lot of retail traders looking at the rally with FOMO. In my experience, such rapid price movements often suggest that traders may be pricing in unexpected news or geopolitical developments but pros should focus more on where to enter, more than where oil is going. The key is the entry point. Now you’re ready for my Crude Oil price forecast video.
Technical Patterns: From the above video showing crude oil technical analysis as well as my predictions, I am starting out from the broaer view on the weekly chart, where I’ve identified:
Key Technical Levels to Watch 🔍
Potential Retracement Zones:
Resistance Areas:
Trading Strategy Insights 🧠
Risk Management:
Placing stop-loss orders is essential to managing potential downside risks. In case support levels like $72.00 fail, it’s crucial to re-evaluate your strategy. Consider setting stop-loss orders just below the trendline, ensuring you’re protected from unexpected reversals.
Profit Targets:
From my own trading experience, patience in waiting for optimal entry points tends to improve risk-to-reward ratios, especially in trending markets like crude oil.
Final Thoughts 💭
While the bullish trend in crude oil is currently strong, entry timing is crucial due to recent rapid price movements. Keep a close eye on the highlighted levels, and stay adaptable to changes in market dynamics, including geopolitical tensions, economic reports, or unexpected supply disruptions.
I have covered my own opinion for the short term crude oil price prediction. You should always do your own research and for those that want to look at a higher timeframe and fundamentals, you can check out the International Energy Agency on oil, as fluctuations in global supply chains remain a key factor influencing short-term price movements.
As always, trade wisely, stay informed, and manage your risks!
For more insights and real-time updates, visit ForexLive.com. Have a successful trading week! 📊🌟
This article was written by Itai Levitan at www.forexlive.com.
Saudi Aramco is the state owned oil producer.
—
The oil price jumped last week in response to a ratcheting higher of conflict in the Middle East.
Chart from ForexLive free charting, access it here
This article was written by Eamonn Sheridan at www.forexlive.com.
In the week leading up to the holiday beginning Chinese authorities announced an array of economic stimulus measures. SOme of the measures were aimed specifically at the property sector, such as:
China’s state broadcaster CCTV reported a statement from the Ministry of Housing and Urban-Rural Development on Saturday saying that the measures are having success. The statement cited the number of people visiting houses and sales offices, as a reflection of buying intentions, along with increased participation in sales promotions.
—
The data these officials are citing is not sales, but I think we can give them some benefit of some doubt of increased activity. I’ll be waiting for more solid data. Chinese equity markets have not been waiting for more solid data, they recorded historic gains in the week leading to the holidays and Hong Kong markets, which reopened on Wednesday last week, have added gains also.
I’m not in front of my regular PC to post a chart, so here’s a quick one from CNBC. Shanghai Composite over the past year. You can see the extent of the rally in the last week of September.
Chinese markets reopen on Tuesday, October 8.
This article was written by Eamonn Sheridan at www.forexlive.com.
The US September jobs report today exceeded expectations, with non-farm payrolls increasing by 254K compared to the 140K anticipated. The unemployment rate fell slightly to 4.1%, nearly reaching 4.0%, and the participation rate held steady at 62.7%.
Private payrolls surged by 223K, while average hourly earnings rose by 0.4% month-over-month and 4.0% year-over-year, both above forecasts.Manufacturing payrolls dropped by 7K, an improvement over prior data.
The household survey showed a gain of 430K jobs, with a notable increase in full-time employment (+631K) but a decrease in part-time jobs (-201K). The strong data diminished expectations for a Federal Reserve rate cut at the November meeting, driving the US dollar higher, but implies a more solid US economy.
With the Fed feeling that inflation is under control, if the jobs gains fill job needs, there is a chance it may not be inflationary and therefore may keep the Fed on it recalibration path. Fed’s Goolsbee was the only Fed officisl who commented on the report, descriving it as „super,“ and also highlighted the end of the port strike as additional positive news.
However, he cautioned against reacting too strongly to a single data point, emphasizing that more reports like this would increase confidence in achieving full employment. He noted that strong job numbers are likely to reflect strong GDP growth.
While the Fed is still determining the neutral interest rate, he suggested it is likely higher than zero and could fall within the 2.5-3.5% range, though there is time to figure this out. Goolsbee stressed the importance of maintaining current economic conditions, and while productivity growth could lead to a higher neutral rate, the economy would need to handle it.
He also acknowledged that broad indicators show the labor market is cooling, but rejected the notion of a „soft landing“ as the economy continues to move forward.
The Fed’s ideal scenario would see unemployment between 4-4.5% and inflation around 2%, which he believes would satisfy the Fed’s goals. As more data becomes available ahead of the next Fed meeting, Goolsbee warned that external shocks could still derail efforts toward a soft landing.
For now, however, it is back to happy/giddy times. Next week the US CPI data will be released with the expectation for the headline (0.1%) and the core (0.2%) to be on the tame side once again, although the core YoY is still elevated at 3.2%. The headline YoY is expected to dip to 2.3% from 2.5%.
The news today sent stocks higher with the Dow industrial average closing at a new record high. A snapshot of the closing levels shows:
The small-cap Russell 2000 rose 32.65 points or 1.50% at 2212.79.
For the trading week, the gains were modest with the Nasdaq up 0.10%, the Dow up 0.09% and the S&P up 0.22%.
IN the US debt market, yields moved sharply higher with:
For the trading week:
Mortgage rates are back up 6.5%
Looking at the strongest weakest of the major currencies, the GBP and the USD are the strongest while the JPY is the weakest.
This article was written by Greg Michalowski at www.forexlive.com.
Looking at the probability of a 25 basis point cut, that is now at 99%, while remaining unchanged is that 1%.
At points last week, the intimate 50 basis point cut was upwards of 60% for November.
This article was written by Greg Michalowski at www.forexlive.com.