The price of oil continues to rise. The course has updated its local maximum, reaching $64 per barrel. After a downward correction at the beginning of this week, the price rose sharply, gaining more than $3 per barrel in a few days. The main catalyst for positive dynamics remains the depreciation of the US currency and the growth in demand for “black gold” against the background of the extension of OPEC+ agreements. An additional support to the instrument was provided by data from the US Department of Energy on a decrease in oil reserves and the number of active drilling rigs. Price remains in a broad upward trend, and this momentum maintains.
Support and resistance
In the medium term, the price may reach 65.00, 67.40 and even a local maximum of mid-September at 69.85. Despite the recent significant growth, the rate is unlikely to rise above the levels of 67.40, 69.85 due to the formation of a long-term narrowing sideways channel. Each next level of resistance will be stronger and stronger, and as a result, the instrument will reverse downwards from a key resistance to the area of $60 per barrel.
On the 4-hour and daily charts, technical indicators still give a strong buy signal, the volumes of long MACD positions are growing, and Bollinger bands are pointing upwards.
Resistance levels: 64.00, 65.00, 66.30, 67.40, 68.00, 69.85, 70.00.
Support levels: 63.50, 63.05, 62.70, 62.05, 61.75, 61.50, 60.85, 60.00.
Long positions may be opened from the current level with the targets at 67.40, 69.85 and stop loss 62.40.
Turning to Currencies
EUR is slightly strengthening against USD during the Asian session, having added 0.06% till the present moment. Insignificant support for the instrument is provided by rather weak positions of the American currency, which came under pressure after the publication of ambiguous data from the USA the day before. Initial Jobless Claims for the week ending November 15 remained at the level of 227K, with a forecast of a decline to 219K. Continuing Jobless Claims rose from 1.692M to 1.695M, while analysts expected a reduction to 1.685M. During the day, European investors expect the publication of statistics from Germany and the euro area on GDP dynamics and levels of business activity. In addition, the market is waiting for the speech of the new ECB Governor Christine Lagarde, who can make significant changes to the policy of the European regulator.
During the Asian session, the pair is showing weak growth, slightly strengthening by 0.08%. The focus on investors remains on the situation around the US-Chinese trade negotiations, which may end in failure. The day before, the PRC noticeably increased criticism of the US after the approval of a bill in the US Senate on the possible restriction of China’s trade preferences in the USA in case of violation of human rights and freedoms in Hong Kong. Negative forecasts on trade negotiations suggest that in mid-December, the United States will introduce new import duties on Chinese goods, which will contribute to the escalation of tension. In the afternoon, investors expect publication of statistics from the UK on the Manufacturing and Services PMI for November.
AUD is showing slight growth against USD during today’s Asian session, adding about 0.05%. The instrument is trying to correct after an active decline for two consecutive sessions; however, the Australian dollar has little fundamental support. Investors are focused on Friday’s statistics on business activity indexes. The Commonwealth Bank Services PMI in November showed a decrease from 50.1 to 49.5 points. The indicator turned out significantly worse than its forecasts, which assumed its growth to 53.5 points. Manufacturing PMI over the same period fell from 50 to 49.9 points, which was 0.1 points better than market expectations. Composite PMI in November corrected down from 50 to 49.5 points, entering the stagnation zone.
USD showed ambiguous dynamics of trading against JPY during the Asian session. The instrument practically did not depart from its opening level at around 108.62. The yen ignored moderately optimistic macroeconomic data from Japan. Inflation Rate Ex-Food and Energy rose in October by 0.7% YoY, accelerating from the previous 0.5% YoY. Forecasts suggested an increase of 0.5% YoY. Jibun Bank Manufacturing PMI in November rose from 48.4 to 48.6 points, slightly not reaching the expected values of 48.7 points.
Gold is stable during the Asian session and is trading at the level of opening at 1463.72. The day before, quotations showed moderate negative dynamics, which was caused by the appearance of optimistic news around the process of trade negotiations between China and the United States. It became known that Beijing invited a team of American negotiators to a new round of discussion of the agreement, despite continuing disagreements. Meanwhile, quotes are supported by the situation surrounding ongoing protests in Hong Kong. The United States have passed a series of bills that support civil protest and seek to exert pressure on China, recalling the need to respect human rights.