Oily update ahead of producers’ meeting

First of all, let us note the producers’ meeting over the weekend is unlikely to change excess supply situation and here is why –

  • Markets would still remain oversupplied by about 2 million barrels per day
  • OPEC and IEA have both revised global oil demand growth forecasts lower
  • Joint OPEC and non-OPEC production cut is unlikely to happen any time soon
  • Furthermore, oil prices have already priced-in output freeze.

Hence, if we have output freeze agreement over the weekend, oil would see a gap up opening and the strength could last till Europe or early US, before “sell the fact” trade takes over – prices begin to fall.

Let us take note of the technical patterns in oil benchmarks.

Brent – Rising Channel on daily chart

brent oil.png

WTI – Double Top on daily chart

WTI oil

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USD/JPY – finding support at hourly 100-MA

USDJPY H1 (04-15-2016 1746).png

USD/JPY is finding support at hourly 100-MA at 108.86 levels.

Point to be noted – Yen is no longer following equity markets, but leading equities. The only way Yen could weaken is on the rise in treasury yields. Otherwise, there is a very little reason for an uptick in USD/JPY pair.

On technical terms, the outlook stays bearish as long as bears are able to defend sideways channel hurdle seen on the daily chart around 110.20.

 

GBP/USD appears weak

gbpusd

repeated failure to take out hourly 200-MA, also marking a failure to take out Ehlers filter coupled with bearish move in hourly RSI indicates the pair is heading to 1.4090 (previous day’s low_.

stops could be placed above hourly 200-MA on hourly closing basis.

Dow Technical update

Dow.png

Dow’s convincing break abv Apr 1 high of 17,811 yesterday has undoubtedly opened doors for a cut through 18K lvls and rise towards July 2015 high of 18,130 lvls.

However, daily RSI still remains below its previous reached earlier this month, which indicates short-term loss of momentum if not bearish takeover.

This means a drop to 17,800 lvls and violation that shall end up sending index lower to 17,500 lvls.

GBP/JPY -Head and shoulder breakout, but risk of it being fake

I called a bullish move yesterday and it has officially failed now given the pair has breached 154.23, which i had mentioned here  GBPJPY – Good times ahead, eyes 155.83-156.66 as one under which short-term bullish invalidation is seen.

Now we also have head and shoulder breakout on the hourly and that gives us a downside target of atleast 100-pips. Cautions is still advised since head n shoulder is effective when it appears at the top of a bullish trend and not at the bottom.

Hence, this could be a fake move.

GBPJPY H1 (04-14-2016 1937).png