Investors are currently worried about the lack of meaningful progress between Washington and Beijing. The market is disappointed with the words of US President Donald Trump, who said the virtual absence of an agreement on the gradual bilateral cancellation of duties. Yesterday, the media, referring to a source in the PRC government, said that Beijing admits the disruption of trade negotiations due to the intervention of the American leader. Risks against the backdrop of a trade dispute continue to have a negative impact on the hydrocarbon market. The instrument will be under pressure until an agreement is signed. In November, “black gold” is trading within a limited price range awaiting news of trade negotiations between the US and China.
Today at 23:30 (GMT+2), the API will release a report on the weekly change in crude oil reserves. According to a Bloomberg poll, stocks rose by 1.5 million barrels last week. Confirmation of the forecast will become a driver of the fall of the rate below the strong support level of 56.00.
Support and resistance
On a 4-hour chart, the instrument moves within a limited price range. It consolidates near the MA. Bollinger Bands are directed sideways, and the price range is limited, which indicates correctional dynamics. MACD is at the zero line, the signal to enter the market is not formed. Stochastic is being corrected at the border of the oversold zone, a buy signal can be formed during the day.
Resistance levels: 57.15, 58.08, 59.40, 60.56.
Support levels: 56.27, 54.76, 53.59, 52.47, 51.16.
Short positions may be opened below 55.90 with the target at 54.05 and stop loss 57.50.
Long positions may be opened above 57.40 with the target at 58.60 and stop loss 57.05.
Implementation period: 1–3 days.
Turning to AUD/USD
Since the beginning of this month, the AUD/USD pair moves downwards. Today, the price fell around 0.6785 amid the publication of RBA Meeting Minutes and negative signals on the US-China trade deal. According to the November meeting report, Australian regulator officials are ready to continue cutting rates if necessary but are still waiting for positive results from the first three cuts, which should support employment, income growth and inflation. However, further rates reduction could harm household savings. AUD is under pressure of reports that the Chinese government is pessimistic about the possibility of an initial trade deal with the United States. According to CNBC sources, officials are disappointed with Donald Trump’s refusal to start tariff abolition. On the other hand, China won’t seriously increase purchases of American agricultural products, for fear of losing other trading partners.
Support and resistance
The price fell around 0.6785 but regained lost positions. The resumption of growth is possible after the breakdown of the zone 0.6835–06850 (Murrey [8/8], Bollinger bands’ midline). In this case, strengthening to the levels of 0.6897 (Murrey [+1/8]) and 0.6926 (November highs, Bollinger bands’ upper line) is possible. The key “bearish” level is 0.6775 (Murrey [7/8]). Its breakdown will let the price fall to 0.6714 (Murrey [6/8]) and 0.6652 (Murrey [5/8]).
Indicators do not give a clear signal. Bollinger Bands reverse downwards. MACD prepares to enter the negative zone and form a sell signal. Stochastic points upwards.
Resistance levels: 0.6850, 0.6897, 0.6926.
Support levels: 0.6775, 0.6713, 0.6652.
Short positions may be opened below 0.6775 with the targets at 0.6713, 0.6652 and stop loss of 0.6810.
Long positions may be opened above 0.6850 with the targets at 0.6897, 0.6926 and stop loss 0.6825.
Implementation period: 4–5 days.