The poor labor data in combination with technicals pointing to the overbought area, GBP/USD has all chances to pullback down.
OIL: stable, finally?
2020-10-19 • Updated
The oil price stabilized around $40. With the exception of a drop down $36 in the beginning of October, it has been trading within the channel between $39 and $41.50 for the last four weeks. Currently, it is in consolidation around $40.50 trading above 50-while all the Moving Averages are assembled in ascending order. Therefore, from the technical perspective, there is little indication for oil to lose value again.
OPEC+ is meeting today. The Joint Ministerial Monitoring Committee will hold an online reunion to check whether all the OPEC+ country members comply with the output cut policy – that the JMMC’s main objective and function normally. No new decisions are expected before OPEC+ next meeting on December 1, however, there is a certainty that the likelihood of easing the cut in the year is very low. Primarily, that’s because of the second wave of COVID-19 which keeps the demand outlook in a gray area. In addition to that, Libya is reported to be increasing its output (that was previously reduced to minimum levels due to the military and political unrest in the country). Therefore, expect to see strict guidelines from the side of OPEC+ which will make sure the cuts are there to put firm ground to the price of oil. For us, it means it may be dropping from time to time to $36 as it did two weeks ago, but lower than that – OPEC+ will try to let that happen.
A logical question related to the oil market is how a potential change of the US President will the oil price. Most observers agree that if something will change, that will be stability: with Joe Biden, it is expected to be higher. That is not because of specific points on his agenda related to oil but rather due to the general “change of attitude”: a steady one. Donald Trump used to move markets – not only oil - with his tweets or comments, sometimes as eccentric as short. Joe Biden seems to be more “emotionally mature” if that may be ascribed to the manner a politician behaves. However, in reality, only time will tell. All we can say for now is that Joe Biden is generally much less “into oil” than Donald Trump – that may be enough for the oil price to be more secure.
Saxo Bank forecasts EUR/USD at 1.1600. Credit Agricole believes the USD will strengthen in the coming months.
Financial giants such as JPMorgan and Goldman Sachs anticipate crude oil to skyrocket as high as $100 as the global economy rebounds.
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