Market reviews | Forex Optimum

Market reviews


Last Day of Dull Trading Hours

Today is the second day of dull trading. The US Dollar Index is at the same level of 96 points. SP500 is being traded within a range of 2410-2450 points.

The major currency pairs are hanging within local sideways trends, near yesterday's levels. EUR/USD is being traded near 1.1139. GBP/USD is near 1.290. USD/JPY is still above 114. The ex-frontrunner in growth, USD/CAD, remains within yesterday's diapason.

On the whole, quotes stay still ahead of the upcoming day, which is going to be busy. On Wednesday, a number of macroeconomic data releases will be published: the average earnings (including bonuses) index, claimant count change, and UK's unemployment rate. In the afternoon, a testimony by Fed's Janet Yellen is expected, following that a speech by her Canadian peer from the Bank of Canada, Stephen Poloz, is going to take place.

On Tuesday, oil prices were trying to stabilize after last week's slump associated with the reaction to statistics. US oil production increased by 1%, and the number of operating oil rigs also increased, according to Baker Hughes, however investors ignored a positive in relation to a rapid decrease in crude oil reserves.

From a technical perspective, Brent oil prices have good chances to consolidate within $45-$48 per barrel under the current conditions. A proper increase is out of the question for now.

The key factors that determine the dynamics of crude oil this week will be data on crude oil inventories, a release from Baker Hughes, and a monthly report by OPEC as well as report by the International Energy Agency.

Lately, OPEC+ has become a newsmaker, however it has been forming a rather ambivalent news background, which is not surprising, considering its members' interest in high oil prices. Specifically, Russia's Energy Minister Novak spoke about a gradual exit from OPEC+, which of course negatively affected prices, but at the same time there are rumours that Libya and Nigeria are ready to join the agreement.

The ruble is trying to stabilize at new levels. Significant fundamental factors, such as sanctions, the difference between interest rates of the central banks, have already been factored in.

Moreover, the G20 summit has ended, where a historical meeting between Putin and Trump took place. No new drivers for the markets resulted from this meeting. There was no new momentum, neither positive or negative. Thus, the only significant factor now is oil prices.

Technically, the USD/RUB currency pair broke above 60 and now a further rise to 62 may continue. The nearest support is at the 58 area.

Ivan Kapustyanskiy, equity analyst at Forex Optimum

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