West TX Oil Rallies to $56 on Falling Crude Inventories

Oil prices jumped on Wednesday as U.S. data showed falling crude inventories, stemming deep losses brought on by a supply glut and signals from OPEC producers and Russia that they will not cut production.

WTI crude closed 54 cents higher at $56.47 per barrel after surging to a session high of $58.98. It touched its lowest level since May 2009 at $53.60 on Tuesday.

Front-month Brent was last up $1 to $61 a barrel shortly on Wednesday. It traded as high as $63.40 earlier in the afternoon. The January Brent contract, which expired in the prior session, hit a low of $58.50 on Tuesday, its weakest since May 2009.

About Stuart McPhee

Senior Currency Technical Analyst, Stuart McPhee has more than 16 years’ experience as a private trader and he specializes in technical market analysis of major currency pairs. He is the author of several bestselling trading books, most recently the fourth edition of his popular book “Trading in a Nutshell” (John Wiley), and he contributes articles to daily newsletters and blogs. He produces articles and videos on the how-tos of technical trading. Based in Australia, Stuart speaks at conferences and events worldwide. Follow on Twitter and on his Google+ profile.

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XE Market Analysis: Asia – Dec 17, 2014

The dollar generally moved higher through the morning session, as yields perked up slightly, stocks and the ruble rallied, as oil prices rose sharply. CPI was a touch cooler than forecast, while the Q3 current account deficit widened some, though had little impact ahead of the FOMC. Activity slowed into the announcement, and following the inclusion of both “patience” and “considerable time” in the statement, the dollar rallied, then fell again, with the FX market ultimately putting a dovish spin on the statement. From post-FOMC lows of 1.2379, EUR-USD rallied toward 1.2475.

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Russian liquidity crisis continues as EXNESS, FXPro and AxiTrader suspend ruble trading

Following yesterday’s announcements by several FX firms regarding the reduction of leverage and in some cases cessation of trading on EUR/RUB and USD/RUB instruments, three further firms have followed suit.

EXNESS has stated that due to the unstable situation in the financial market, it has suspe…
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XE Market Analysis: Asia – Dec 16, 2014

Markets looked a little scary early in the N.Y session on Tuesday, following Russia’s rate hike, as the ruble plunged to record lows, a fresh trend low in oil prices, diving sovereign yields, and retreating equity markets. As the morning progressed however, sentiment turned around some, allowing the dollar to rally some, oil prices to move modestly higher, and Wall Street turn positive. EUR-USD started out near 1.2560, and later posted 1.2478 lows. USD-JPY, which had been beaten down to near 115.55 into the open, climbed back over 117.75 into the London close.

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ST Technicals Offer Moment of Reflection in EUR-crosses

Talking Points:

  • EURUSD now in symmetrical triangle as it grapples with wedge.
  • EURAUD rising channel may come into question below 1.4972.
  • December forex seasonality foresaw a modestly weaker Euro.

Short-term technicals may be at odds with long-term perspectives at present moment, putting many of the EUR-crosses on watch for some volatility over the next few days. Even though portfolio rebalancing and overstretched short positioning may be contributing to the recent rebound, a degree of patience is required before engaging the Euro from the short side once more.

The nature of this short covering rally should keep longer-term bears salivating at the opportunity to reload at a better price. Peak bearishness was evident in the week ended November 4, when traders were net-short to the tune of 179.0K contracts.

As of December 9, with short positions being covered, only 136.9K contracts remained. Herein lies the longer-term hope for bears: even as short positions abated from the November 4 to December 9 period, EURUSD still managed to decline by -1.37%.

A reestablishment of short sellers back at the early-November levels could bring about the new wave of downside in the EUR-crosses.

See the above video for technical considerations in EURUSD, EURAUD, and EURGBP.

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AUD/JPY Short Scalps Eye Interim Support at 96.50 Ahead of RBA

The sell-off is approaching an area of technical support with shorts at risk near-term above 96.50. Here are the updated targets & invalidation levels.

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Europe back in the red as oil falls to five and a half year low

  • Oil price decline unwinds some of the retail sales gains overnight;
  • WTI crude hits five and a half year low, falling below $60 a barrel;
  • US government avoids shut down as spending bill narrowly passes;
  • Mixed Chinese data as better retail sales offset disappointing industrial production;
  • Few data points of note today but nothing major.

European indices are expected to open deep in the red on Friday, as a negative end to the US session overnight feeds through into Asian and European markets as we head into week end.

It was all looking rosy during the US session yesterday, retail sales data was much better than expected thanks to better holiday spending as consumers and retailers begin the feel the benefit of lower prices at the pump. However, as the session wore on and oil prices continued to tumble, energy stocks really started to feel the pressure of US crude falling below the psychologically important $60 a barrel level.

It’s been another bad week for energy stocks, with oil prices falling more than 9% as OPEC – which accounts for one third of global oil production – cut its 2015 demand forecasts to the lowest in more than a decade, while at the same time its most influential member, the Saudi’s, continued to deny that there would be any slow down in production. It’s a battle over market share at the moment and no one wants to back down. The supply glut in the oil market saw inventories in the US grow again this week, helping to further weigh on oil prices. The decline in oil prices is showing no signs of slowing which would suggest that $50 a barrell is quite likely and soon.

The move to a five and a half year low in US crude was accompanied by concerns over another government in …read more

Positioning Unwind May be Driving Factor, Not QE, for Euro

Euro bulls shouldn’t get too comfortable, as short covering is only producing a mild upswing in price – for now.

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Bitcoin Range Continues for a Second Day

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Bitcoin is continuing to trade range-bound. After yesterday’s $10 dollars, the range today shrunk to a mere $7 dollars. The daily low stands at $340.03 and the high at $347.50. We are currently quoted just of the highs at $341.83 on BTC-E. As usual prices are somewhat higher on OKCoin at $345 and BitStamp at $350. The chart below shows yesterday’s range marked in yellow, today’s range is colored purple.

As we’ve seen recently, congested periods like these often end in breakouts. The main points to watch for are $360 on the upside and $332 on the downside. A move below $332 may lead to more losses toward the $319 swing low. This is followed by the $300 round figure. A breakout above $360 may accelerate the gains to $388. Above here, possible resistance levels include $400 and the important swing high at $454.

In an email exchange with CryptoCoinsNews, BTC payment processor BitPay provided some numbers on merchants holding bitcoins. According to the company, out of a total of 44,000 merchants, 22,000 convert all the coins received to cash. A smaller 18,000 hold on to some coins and only 4,400 merchants keep all bitcoins received as payment. BitPay didn’t provide a breakdown on the percentage of total volume converted to fiat.

This makes it hard to judge exactly how much of the BTC received is instantly converted and thus has a downward pressure on the price. But I would suspect that most of the merchants holding on to bitcoins are the smaller shops. The only figure we have for a major retailer is that Overstock keeps 10% of all bitcoins received. Since Overstock is run by Patrick Byrne, a big supporter of cryptocurrencies, the percentage for other …read more

Weekly Trading Forecast: Will the Fed Rate Decision Curb or Accelerate the Market’s Tumble?

Volatility soared this past week with both the Dollar and S&P 500 suffering. With a round of high level event risk – the Fed decision included – this week is unlikely to be the typically quiet year-end liquidity drain.

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