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Daily Fundamental ForexTime ( FXTM )

Discussion in 'Analisa Fundamental' started by Forextime FXTM, Sep 6, 2016.

  1. Forextime FXTM

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    UK Services PMI seizes centre stage


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    Global stocks received a welcome boost last week following the soft U.S jobs data for August which questioned the likelihood of the Federal Reserve raising US interest rates in 2016. Asian markets commenced Monday on a solid footing with the Nikkei rising +0.66% as expectations heightened over the BoJ implementing further stimulus measures to stabilise its ailing economy. European stocks charged into fresh four-month highs last week with further gains expected today if Asia’s bullish contagion trickles into the European markets. Wall Street was elevated higher on Friday as the combination of Dollar weakness and fading rate hike hopes attracted investors to riskier assets.

    Although stock markets may be open to further gains in the short term, the ingredients for a bear trend remain visible and such should keep investors alert. The ongoing concerns over the global economy may spark jitters while depressed oil prices weigh heavily on investor risk sentiment. Uncertainty is still a recurrent theme in the markets which could offer an opportunity for bears to exploit the over-extended relief rally in stocks. While a September rate hike may be discounted following the recent soft U.S jobs report, the 41% possibility of the Fed taking action in December could pressure stocks in the future.

    Dollar vulnerable post-NFP

    Dollar bulls were left empty handed on Friday following August’s soft NFP headline figure of 151k which instantly dampened hopes over the Federal Reserve raising interest rates in September. Average earnings reduced by 0.1% and when such was combined with the soft headline figure of 155k, many questions were raised over the resilience of the US labour force in this period of uncertainty. Although US domestic data in August has followed a positive path, this soft U.S jobs data may have provided a strong reason for the Fed to remain on standby in September. For December to be a “live” meeting for the Fed to break the tradition of central bank caution, US data may have to repeatedly exceed expectations with the U.S labour showing greater signs of improvement.

    The Dollar received a heavy blow after the soft U.S jobs report with the Dollar Index finding it difficult to break above 96.00. This Index may turn technically bearish once sellers conquer the daily 20 SMA. A solid breakdown below 95.50 could encourage a further decline back towards 95.00.


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    Sterling firm ahead of UK services PMI

    Sterling experienced an incredible rebound last week with the GBPUSD charging above 1.3300 as the combination of repeatedly positive domestic UK data and Dollar weakness invited bulls to install heavy rounds of buying. Sentiment towards the Sterling has been uplifted following the impressive manufacturing and construction PMI releases which questioned if the Brexit had any negative impacts on the UK economy. With the string of positive economic data eroding expectations over the Bank of England easing further in the future, Sterling bulls have run rampant.

    Investors may direct their attention towards the critical services PMI report which may offer clarity on how services have fared post-Brexit. If UK services follow the same positive pattern as construction and manufacturing, then Sterling could be open to extreme gains moving forward.

    While further gains in the Pound could be realised in the short term amid the positive data, it still remains too early to come to a decisive conclusion on how Brexit has affected the UK with more time needed to weigh the impacts.

    Commodity spotlight – WTI Oil

    WTI Oil rallied towards $44.60 on Friday and this has nothing to do with an improved sentiment towards oil but Dollar weakness from fading US rate hike expectations. Although further gains in oil prices may be realised in the short term amid Dollar weakness, this commodity remains fundamentally bearish.

    It should be kept in mind that concerns remain elevated over the excessive oversupply of oil in the global markets while the fading hopes over OPEC securing a freeze deal in September’s informal meeting continue to cap upside gains. With crude oil stock piles rising incessantly further losses may be expected in the longer term when bears exploit the current correction to install a heavy round of selling. From a technical standpoint, prices remain bearish and a move back below $44 could open a path towards $40.



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  2. Forextime FXTM

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    NZ economy lifts on data


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    The New Zealand dollar has managed to claw back some of it's earlier losses as the strong dollar starts to wane, and as economic data out of New Zealand continues to be a mixed back but mostly bullish. Two ANZ surveys released today showed the New Zealand economy picking up as commodity prices lifted to 3.2% (prev 2.0%). At the same time the ANZ truckometer was released which acts as a proxy for GDP readings and it was strongly up 6.7% m/m (prev -5.7%), which shows that expectations for GDP in the coming quarter are slightly weaker, but the following quarter is expected to see an overall lift in GDP for the economy. For many this will be a positive sign for the New Zealand economy, but for the Reserve Bank of New Zealand they will be looking to make sure that house prices are kept in check and that if the economy starts running red hot it may be time to tighten interest rates in order to keep inflation in check.

    Technically the NZDUSD has been struggling lately as volatility continues to play havoc for traders trying to trade key levels. The main level being 0.73118, which so far has had a number of attempts to close above it on the daily chart, but all failing in the last fortnight. However, with pressure building it certainly could be a case of a breakout and the NZDUSD would likely run in such a scenario and looking for higher highs. In this case 0.7475 being the next level of resistance traders are likely to find, unless we see some sort of major economic data which boosts the NZ economy strongly.

    Across the pacific ocean in the USA we have seen US data recently seem to lack any real power in the marketplace with non-farm payrolls being much weaker than anticipated at 151k (180k exp), this in turn lead to a spike in the unemployment rate to 4.9%. So far the USD has suffered slightly for this, but for the most part people still expect that not even a blip in non-farm payroll can prolong the odds of an interest rate rise in the USA. Expectations around this continue to build, and if we see any further movement in unemployment claims this may add weight to the theory that something may be stifling the labour market at present. For the S&P 500 this weakness followed by bets on a rate hike have stopped it in its tracks and it's currently ranging as a result.

    Resistance at 2185 continues to stop any sort of momentum for the S&P 500 and I would be surprised if the recent push higher can gain any sort of traction to push through at this stage. As the S&P dips lower it's playing between two key support levels at 2168 and 2152, any drop to the 2152 support level is likely to find the 50 day moving average which has acted as dynamic support in the past. However, with the technical build up, it's still possible for the S&P 500 to fall further as the bets for rate hikes increase.



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  3. Forextime FXTM

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    AUD bulls look cautious

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    The Australian dollar has come managed to climb the charts on the back of USD weakness today, but all is not as rosy as it seems and it's becoming clear that the Australian economy is really struggling after all three PMI readings this month fell below expectations. Manufacturing and Services PMI readings showed large drops which had many worried, and now Construction PMI data out today came in at 46.6 (51.6 prev) showing a contraction in the sector. This is nothing new that the Aussie economy is struggling but it does lend weight behind the idea that the Reserve Bank of Australia should look to prop up the economy and an interest rate cut may be needed here. However, the property market will be a major concern with housing approvals jumping on the most recent reading on weaker interest rates over all.

    Technically on the charts the AUDUSD has broken out of the bearish widget that it was forming and has pushed up to resistance at 0.7690 and is looking very unlikely to continue this movement unless we see further USD weakness. For me a pullback is more likely on the cards given the weak data that continues to come out of the Australian economy and shows no signs of letting up, so support at 0.7638 has become all the more tangible in recent times. I would also watch the 50 day moving average which has been acting as dynamic support and resistance as well for the market.

    The New Zealand dollar was spoken about heavily yesterday, and for good reason as pressure was finally building and it seemed that we may indeed see a break out for the NZDUSD. After today it can be confirmed that the bulls have looked to take back control after markets pushed through the ceiling of resistance at 0.7311. This has been lead in two parts, firstly by the shocking ISM non-manufacturing PMI which has shown a bigger drop than anyone expected in the USA to 51.4 (55.0 exp). This has had a large impact as USD selling as a whole was heavy today. Additionally we saw positive data out of the NZ market as manufacturing sales q/q lifted to 2.2% (-2.6% prev), and will be a welcome note to the NZ economy which has for the most part been struggling as of late and looked like further rate cuts may be on the horizon. It will be hard to justify them now given the recent economic turnaround, but the NZD will remain a concern for the RBNZ and it's likely it will look to talk down the high flying NZD.

    Glancing at the technical's and as I mentioned yesterday the next level of resistance is looking likely at 0.7475. Any pulls backs are a real possibility after yesterday's move, but I would anticipate support to now be formed at 0.7311 and the likelihood that the previous bullish trend line will hold up further movements. The 20 day and 50 day moving average are also providing support and are just below the trend line and likely to prop up any further drops and assist bulls.





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  4. Forextime FXTM

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    Oil uplifted by renewed freeze deal hopes


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    WTI Oil displayed an incredible rebound on Monday with prices piercing above $46 after Russia and Saudi Arabia pledged to stabilise the saturated oil markets. With Russia and Saudi Arabia being the largest oil producers in the world, the prospects of a potential deal formed by these powers has generated sharp speculative boost in prices. Although there have been talks that the cooperation marks a “new era” which would have a “critical significance”, it still does not change the current oversupply woes which have made Oil fundamentally bearish. While the short term gains from freeze deal speculations have been impressive, the commodity remains pressured with further losses expected if September’s informal OPEC meeting concludes without an effective deal.

    Oil’s woes remain the oversupply fears which have haunted investor attraction and a freeze deal at the current record output levels may do little to ease these anxieties consequently weighing heavily on investor risk sentiment. For Septembers meeting to have a significant impact on Oil prices there needs to be a solution to remove the excessive oversupply but the question is are other OPEC members willing? It should be kept in mind that OPEC’s crude production jumped to a record high in August while Iran remains on a self-fulfilling quest to reclaim lost market share. The cartel faces an obvious prisoner’s dilemma from cutting production which may entice US shale to jump back into the markets.

    WTI is still technically bearish on the daily timeframe as prices are trading below the daily 20 SMA while the MACD trades to the downside. $46 could act as a significant resistance which encourages bears to drag prices back down lower towards $44. A decisive breakdown below $44 could encourage a steeper decline lower towards $40.

    Commodity spotlight – Gold

    Gold was propelled higher last week with the metal charging towards $1330 following the soft U.S labour report which dented expectations over the Federal Reserve raising US interest rates in 2016. This yellow metal remains highly sensitive to US rate rise speculations and with current hopes fading, further gains could be accumulated in the short term. With concerns still lingering over the health of the global economy, Gold could regain some allure as investors flock to safe-haven safety. Although prices are still technically bearish on the daily timeframe, Dollar weakness could propel the metal back above $1345 consequently handing bulls back control. From a technical standpoint, Gold needs to strongly break above $1330 to signal a further incline towards $1345.


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  5. Forextime FXTM

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    AUD bulls look cautious


    [​IMG]


    The Australian dollar has come managed to climb the charts on the back of USD weakness today, but all is not as rosy as it seems and it's becoming clear that the Australian economy is really struggling after all three PMI readings this month fell below expectations. Manufacturing and Services PMI readings showed large drops which had many worried, and now Construction PMI data out today came in at 46.6 (51.6 prev) showing a contraction in the sector. This is nothing new that the Aussie economy is struggling but it does lend weight behind the idea that the Reserve Bank of Australia should look to prop up the economy and an interest rate cut may be needed here. However, the property market will be a major concern with housing approvals jumping on the most recent reading on weaker interest rates over all.

    Technically on the charts the AUDUSD has broken out of the bearish widget that it was forming and has pushed up to resistance at 0.7690 and is looking very unlikely to continue this movement unless we see further USD weakness. For me a pullback is more likely on the cards given the weak data that continues to come out of the Australian economy and shows no signs of letting up, so support at 0.7638 has become all the more tangible in recent times. I would also watch the 50 day moving average which has been acting as dynamic support and resistance as well for the market.

    The New Zealand dollar was spoken about heavily yesterday, and for good reason as pressure was finally building and it seemed that we may indeed see a break out for the NZDUSD. After today it can be confirmed that the bulls have looked to take back control after markets pushed through the ceiling of resistance at 0.7311. This has been lead in two parts, firstly by the shocking ISM non-manufacturing PMI which has shown a bigger drop than anyone expected in the USA to 51.4 (55.0 exp). This has had a large impact as USD selling as a whole was heavy today. Additionally we saw positive data out of the NZ market as manufacturing sales q/q lifted to 2.2% (-2.6% prev), and will be a welcome note to the NZ economy which has for the most part been struggling as of late and looked like further rate cuts may be on the horizon. It will be hard to justify them now given the recent economic turnaround, but the NZD will remain a concern for the RBNZ and it's likely it will look to talk down the high flying NZD.

    Glancing at the technical's and as I mentioned yesterday the next level of resistance is looking likely at 0.7475. Any pulls backs are a real possibility after yesterday's move, but I would anticipate support to now be formed at 0.7311 and the likelihood that the previous bullish trend line will hold up further movements. The 20 day and 50 day moving average are also providing support and are just below the trend line and likely to prop up any further drops and assist bulls.



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  6. Forextime FXTM

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    Dollar retreats as Fed hike hopes fade


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    Dollar bears were unleashed on Tuesday following the disappointing U.S ISM services data which dented hopes over the Federal Reserve raising US interest rates in September. The ISM non-manufacturing PMI for August came in at 51.4, making it the lowest since February 2010 consequently rekindling concerns over the health of the US economy. September has been a painful start for the Dollar bulls with the recent soft domestic economic releases challenging the bullish sentiment which initially elevated the Dollar. If US data continues to miss expectations then talks of September being a live meeting to raise rates could be thoroughly discounted with a move in December hanging on a thin line.

    The Dollar Index plummeted on Tuesday with prices breaking below 95.00 as hopes over the Fed breaking the tradition of central bank caution faded into the distance. Prices are trading below the daily 20 SMA while the MACD has also crossed to the downside. If the bearish momentum holds then the Dollar Index could trade lower towards 94.20.

    Sterling bulls unchained

    Sterling has enjoyed an extended period of gains with the GBPUSD charging to eight week highs at 1.344 as the combination of impressive UK economic data and Dollar weakness attracted bulls to install heavy rounds of buying. Sterling has had a good run with the string of positive PMI releases over the past week dispelling ongoing concerns that the EU referendum outcome may have an immediate negative impact on the UK economy. Although further gains in the pound may be accumulated in the short term as expectations diminish over the BoE unleashing further stimulus measures, it may be slightly early to come to a decisive conclusion with more time needed to weigh the impacts of Brexit to the UK economy.

    Investors may direction their attention towards the UK manufacturing production data which could provide additional clarity on how the sector has fared post-Brexit. A release which follows the same positive pattern and exceeds expectations could reinforce further confidence into the UK economy consequently propelling the Sterling higher.

    The BoE inflation report hearing may be the event which seizes centre stage today where Governor Carney will testify to the Treasury Select Committee. Mark Carney may likely reiterate his dovish mantra on the health of the UK economy while potentially suggesting of further stimulus measures in the coming months to retain economic stability. While questions may be asked if the BoE acted too swiftly to easing monetary policy post Brexit following the recent string of positive data, it still remains too early to gauge the effects of Brexit to the UK.

    Commodity spotlight – Gold


    Gold displayed an incredible appreciation on Tuesday with prices lurching towards $1352 following the soft US ISM services data which eroded optimism over the Fed raising US interest rates in September. The sharp uplift was complimented with Dollars vulnerability which provided a solid platform for bulls to install heavy rounds of buying. With hopes fading over the Fed stepping forward to raise rates in September, this yellow metal could be open to further gains moving forward. From a technical standpoint, prices have turned bullish on the daily timeframe and the breakout above $1345 could open a path towards $1355.


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  7. Forextime FXTM

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    Commodity currencies take the spotlight


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    The Canadian dollar managed to buck the trend and rise up the charts today against the USDCAD as despite keeping rates on hold at 0.50% and Ivey PMI slipping to 52.3 (55.9 exp) the CAD remained firm. But this was not just purely on the back of positive data, instead it was helped also by oil prices managing to rise and the Canadian dollars correlation with oil prices also helping to drive home the movements that we saw against the USD. Oil's jump was led in part by talk of a large drawdown in US crude oil inventories, but at the same time it was announced that 3 billion barrels had been found in West Texas via shale and this was likely to put into production in the next few years. For me the Canadian dollar continues to be a popular currency to trade with its strong swings being attractive to traders

    Looking at chart movements it's clear that a bullish trend line on the daily chart is having a large impact for traders, and any movements lower are likely to find support at this key area. The push back up to resistance at 1.2913 lacked momentum today, but a touch on the trend line could lead to a push through this level with some serious volatility. If the trend line was likely to break then I would expect a push down to support at 1.2568 as traders look to take the wind out of the bulls.

    The Australian economy had a bad day yesterday when it came to economic data and today was not to different with GDP figures showing a drop much worse than expected. GDP q/q was down to 0.5% (0.6% exp) and GDP y/y slipped to 3.3% (3.4% exp). By any standards this is still a strong reading for any developed economy, but in the case of Australia it shows the economy consistently slowing down at present with sluggish capital spending and all the PMI figures showing a slowdown it's a matter of time before the Reserve Bank of Australia talks down the AUD over the issues that are at hand. With all of the current issues a rate cut will also being priced in by the market, and bets are likely to increase with further negative data that the rate cut will come sooner rather than later. There is little hope in waiting for a US rate hike at this stage to help push the AUD down, as data continues to be a mixed bag throughout the USA.

    The AUDUSD has so far stalled from going any higher at 0.7690 as it acts as a strong level of resistance in the market. At this stage given the negative fundamental data it's likely that the bears will use technical's to play the AUDUSD down in the long run, while also betting on the Reserve Bank of Australia to say something. Support levels can be found at 0.7635 and 0.7582, with traders likely to targets these levels as the AUDUSD falls and the bears look to make the most of the negative fundamental data we are seeing.



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    Draghi disappointment propels Euro higher

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    The Euro was flung onto a chaotic rollercoaster ride on Thursday following the European Central Bank’s decision to keeping its monetary policy stance unchanged despite the worrying state of the European economy. Official interest rates were left unchanged while monthly asset purchases of $80 billion were confirmed to run until the end of March 2017 which left investors empty handed. With uncertainty still a recurrent theme in the markets, most central banks have adopted a stance on inaction and such was displayed in today’s ECB meeting. Although Draghi pledged that the ECB would act by using all instruments available within its mandate to bolster Eurozone growth, this may have fallen on deaf ears.

    It is becoming increasingly clear that the Eurozone is entangled in a losing battle with faltering growth while static inflation levels continue to question the ECB’s credibility. Although Draghi also suggested that the economic recovery in Europe is likely to be dampened by the UK’s Brexit vote, this was still not enough to prompt the central bank to act. While Draghi’s dovish rhetoric may have opened doors for an extension to bond buying program beyond March 2017, the visible disappointment could propel the Euro higher. Sentiment remains bearish towards the Eurozone and today’s inaction may spark further questions over the central bank’s ability to jumpstart Eurozone growth.




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    Dollar rebound after ECB meeting



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    We have seen a big drop in the dollar during the beginning of this week, after ISM Non-Manufacturing figures sank to 6-year low, sending a clear message to the market that a rate hike in the near future is very unlikely, especially after the recent disappointment in the U.S jobs report last Friday.

    Immediately after these figures, September rate hike probability fell to 26.0% 30.8% in November while the chances for a move in December remain at 54.0%.

    [​IMG]

    As of today, the U.S Dollar managed to bounce in the beginning of the U.S trading session on profit taking as September FED meeting looms.

    Looking at the major economic releases which came out today, the ECB rate decision was a disappointment for investors today as the central bank decided to keep all the three-benchmark rates unchanged and to keep asset purchase program at 80 billion euros a month. In the meantime, the bank reaffirmed that it is planning to run QE until March 2017 or beyond if needed.

    The Euro rose to as high as 1.1327 before to retreat below 1.1300 handle as the bullish momentum faded.

    In the U.S, initial jobless claims dropped to 259K down from 263K previously while the continuing claims came out below estimates at 2144K.

    Technically, the dollar remain bearish in the daily chart, while in the near-term, the outlook is flat. The Greenback keep trading sideways between 96.25 level in the upside and 94.00 support in the downside, which keeps the short-term view unclear. Therefore, traders should focus on this zone, as a break outside of it will trigger a big move in the dollar during the following days.

    Looking at the levels of interest in the hourly chart, 94.40 is seen as the short-term support, in the opposite, 95.00/20 is considered as a strong resistance zone.


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    Risk aversion sweeps across the board

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    A wave of risk aversion engulfed the financial markets last week following the instances of central bank caution which weighed heavily on investor risk sentiment. Asian shares were depressed on Monday with most stocks suffering their largest losses since June as fears over central banks adopting an inactive stance sparked market jitters. European markets were dragged into bear territory on Friday and could descend lower this week if the ongoing concerns over the effectiveness of central bank intervention repel investors from riskier assets. With expectations fluctuating over the Federal Reserve taking action this year, Wall Street may be flung on a chaotic roller coaster ride as investors systematically offload and reload positions.

    Global stocks may be poised for steeper losses if the combination of central bank caution and fading optimism towards the effectiveness of stimulus measures forces investors to scatter from riskier assets. With concerns still elevated over the health of the global economy and the oversupply woes ensuring oil prices remain depressed, stock markets could be set for a heavy selloff. The attributes for a bear rally are already in place with an unexpected catalyst needed for bears to be provided a foundation to install repeated rounds of selling.

    Dollar stuck in tug of war

    The Dollar has been on a wild ride with prices erratically swinging between losses and gains as expectations over the Fed raising US interest rates fluctuate. Although Janet Yellen gifted investors the clarity long sought in the Jackson Hole meeting a few weeks back, the conflicting domestic data continues to leave most wondering if anything will be done this year. The recent soft US labour report combined with the string of disappointing US data has thoroughly discounted any hopes of September being a live meeting to raise US interest rates. Although there is only a 24% probability that the Fed breaks the tradition of central bank caution in September, the element of surprise has noticeably left investors on edge. Investors may direct their attention towards FOMC Member Lael Brainard’s speech for additional clarity on when the Fed plans to act. If by any chance hawks come out to play then the Dollar bulls could be installed with some inspiration ahead of next week’s FOMC meeting.

    Sterling bears make an appearance

    Sterling bears were unleashed last week with the GBPUSD sinking towards 1.3250 as the renewed Brexit fears haunted investor attraction towards the currency. Prices were dragged lower following Dollars resurgence which provided a solid foundation for investors to install repeated rounds of selling. Although the string of positive PMI releases in recent weeks provided Sterling somewhat of a lifeline, investors have started to realise that it may be too early to gauge the impacts of Brexit consequently leaving the pound pressured. With the economic news calendar light today, price action could prevail and such may leave the GBPUSD open to further losses. From a technical standpoint, a decisive breakdown below 1.3250 could open a path lower towards 1.3150.

    Commodity spotlight – WTI Oil

    WTI Oil stumbled below $45 on Monday after U.S oil drillers added rigs in a quest for new production as participants adjusted to prolonged periods of low oil. It is becoming increasingly clear that the oversupply concerns have gripped oil prices with the previous speculative boosts swiftly surrendering their gains. Bears may be back in town with steeper losses expected if OPEC’s informal meeting in September concludes without a solution to quell the excessive oversupply. From a technical standpoint, WTI is turning bearish on the daily timeframe as prices are trading below the daily 20 SMA while the MACD has crossed to the downside. A strong breakdown and daily close below $45 could entice sellers to send prices lower towards $44.



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