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Antipodean currencies soar to 10-month highs as risk appetite returns

Posted on April 19, 2016 at 11:53 am GMT

The Australian and New Zealand dollars soared to 10-month highs on Tuesday as risk appetite made a strong return on steady oil prices. Crude oil prices rebounded sharply on Monday after starting the day 6-7% lower following the failure of major oil producers on Sunday to agree to a freeze in output. Commodity prices have been recovering from their January/February lows, led by a rally in oil prices that was mainly driven by expectations that major oil producers such as [..]

Stock market rally despite oil deal collapse could reinvigorate US dollar at some point

Posted on April 19, 2016 at 9:51 am GMT

The collapse of the deal to freeze oil output at the Doha meeting on Sunday came as a big surprise to market participants, as major producers such as Russia and Venezuela had invested significant efforts and political capital into it. In the end, it looked like Saudi Arabia was still not on board, as they blamed their foe Iran for not signing up to the deal but this might have been just a pretext for the Saudis to keep the [..]

Asian Session – Risk-on drives commodity currencies higher but dollar muted

Posted on April 19, 2016 at 8:13 am GMT

Commodity currencies extended yesterday’s gains into Tuesday’s Asian session as oil prices recouped most of their losses following the failure of talks on Sunday by major producers to limit supply. US oil futures recovered from Monday’s low of $37.59 a barrel to climb to $40.34 a barrel in Asian trading today. The Australian dollar rose to a 10-month high of 0.7802, while the New Zealand dollar also climbed to its highest since June 2015 to break above the 0.70 level [..]

Technical Analysis – Gold neutral medium term bias

Posted on April 19, 2016 at 7:05 am GMT

In the medium term, the market maintains a neutral bias between a broad range of 1200 and 1280. Gold staged a strong rally from lows of 1046.29 in December 2015 to a 14-month high of 1283.42 in March 2016. The rally reversed lower from this peak after RSI reached overbought levels near 70 and fell back down. This March peak could be seen as the head of a possible head and shoulders chart pattern that is in the process of [..]

European Session – Oil off post-Doha lows, dollar back above 108 yen

Posted on April 18, 2016 at 1:58 pm GMT

The post-Doha tumble in oil prices and risk assets seemed to have levelled off in the European session. Oil prices stabilized after dipping at the open in Asia on Monday, when US crude oil futures touched as low as $37.61. Prices bounced 5% in the European session from the intra-day low to reach a session high of $39.52. The Canadian dollar fell in response to the slide in crude oil prices after markets were unsettled on news that oil producers [..]

Technical Analysis – US oil futures rebound from 1-wk lows

Posted on April 18, 2016 at 12:43 pm GMT

US oil futures plunged to a one-week low of 37.59 on Monday after major oil producers failed to agree on a production freeze. Prices quickly rebounded though to briefly peak at 39.52 but later settled just below 39 at the 23.6% Fibonacci retracement level of the upleg from 27.54 (January 20) to 42.47 (March 18). Today’s drop has eroded oil’s positive bias when prices were trading above the 200-day moving average. However, failure to break above the March 18 high [..]

Oil prices stabilize but outlook bleak after producers fail to agree output freeze

Posted on April 18, 2016 at 10:12 am GMT

Crude oil prices were stable on Monday after opening sharply lower following unsuccessful talks in Doha on Sunday to cap output. Eighteen OPEC and non-OPEC nations met in the capital of Qatar yesterday to try to reach an agreement on a possible production freeze that would have lent support to oil prices, which have tumbled around 75% since mid-2014. Oil prices rallied 60% from their 2016 lows after major producers consisting of Saudi Arabia, Russia, Venezuela and Qatar announced a [..]

Asian Session – Oil plunges after failure to agree production freeze; loonie and aussie tumble

Posted on April 18, 2016 at 7:35 am GMT

Market sentiment turned sour on Monday after talks on Sunday between 18 OPEC and non-OPEC countries taking part in negotiations to freeze output failed to produce an agreement. A deal was scuppered after OPEC’s largest producer, Saudi Arabia, refused to sign up to any agreement without Iran, which was not represented at the meeting. After only recently resuming exports, Iran is keen to see its output recover to pre-sanctions levels before agreeing to any production caps. Hopes now lie on [..]

Technical Analysis – EURUSD pauses rally, tests 1.13

Posted on April 18, 2016 at 6:36 am GMT

EURUSD reversed lower after reaching the highest level in six months last week, when it touched 1.1463. Prices found support at 1.1233 – which is around the 23.6% Fibonacci retracement level of the 1.0520 to 1.1463 upleg (December 2015 to April 2016 rise). RSI has fallen to test the 50 level, suggesting the stronger downside momentum. The break below the key 1.13 level which coincides with the 21-day moving average, strengthened the bearish view. Failure to close above 1.13 would [..]

The mystery of yen strength and the benefits of commodity currencies

Posted on April 15, 2016 at 2:55 pm GMT

One interesting feature of the past few days has been the strength in commodity currencies. The Australian dollar, the New Zealand dollar and the Canadian dollar have been some of the best performers of the past weeks, in the absence of any significant action in major pairs. The reason has maybe more to do with the oil price. Oil is managing to hold on to the $40 level for now and this is lending support to these currencies – particularly [..]

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