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The worries about global economic slowdown drove the oil prices down again

Discussion in 'Current Market Sentiments' started by fx-recommends, Jan 6, 2016.

  1. fx-recommends

    fx-recommends Content Contributor

    Aug 6, 2008
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    Brent-FEB16 Daily 06-01-2016 07-09-03 ص.jpg

    The Chinese reaction to last Monday Equities selloff could dominate the markets which are waiting for more stimulating measurements to be taken by PBOC.

    While Dec Caixin China Services PMI came today to underscore the economic slowdown in China by falling to 50.2 which is the weakest pace of expansion since July 2014, after 51.2 in November.

    The Chinese Yuan has suffered also by the odds of watching economic slowdown in China and the Japanese yen could gain benefits from this suffering to replace the Yuan as a an Asian reserve currency, while there is no signal from BOJ yet to take further easing steps.

    Nikkei 225 has been negatively impacted by the Japanese yen appreciation this year which hurts the Japanese exporting activity.

    While the common currency was facing increasing selling pressure because of the tame inflation pressure in EU which can lead to further stimulating measurements to be taken by the ECB which shocked the markets by lowering the deposit rate by only 0.1% to -0.3% last meeting on last Dec. 3 with no change of its QE.

    Dec Germany preliminary CPI came last Monday to show rising by only 0.3% y/y, while the market was waiting for 0.6% increasing, after 0.4% in November and also EU CPI flash reading has shown yesterday rising by only 0.2% as the same as November, while the consensus was referring to increasing by 0.3%.

    The market will be closely watching next the coming data from the US labor market this week which will start today with the release of US ADP Employment change.

    Brent FEB 16 has come again under pressure with continued worries about the demand solidarity, after the economic slowdown signs from china and the weaker than expected manufacturing performance in US last month.

    Brent FEB 16 which could capitalize on the Iranian Saudi rising tension because of Saudi Arabia’s execution of Saudi Shiite Cleric to reach $38.97 retreated again to be trading near $36.50 ahead of today release of US EIA Oil stockpile of the week ending on Jan. 1, after rising of US EIA Oil stockpile of the week ending on Dec. 25 by 2.629m to 487.409m weighed down on the oil prices, as the market was waiting for decreasing by 2.5m barrels.

    Brent could hardly form a base at $35.98, after increasing of the downside momentum following forming lower high at $39.68 on Dec. 15.

    The slide from $39.68 could not be contained yet, as its rebound from $35.98 ended until now to forming another lower high at $38.97 to come down again for trading below its daily SMA20 with continued existence below its daily SMA50, SMA100 and SMA200.

    Important levels: Daily SMA20 @ $37.61, Daily SMA50 @ $42.61, Daily SMA100 @ $45.65 and Daily SMA200 @ $52.99


    S1: $35.98
    S2: $35
    S3: $34.19
    R1: $38.97
    R2: $39.68
    R3: $41.56

    Have a good day

    Walid Salah El din
    Senior Market Analyst
    Skype : chief.economist.walid

    Tel: UK. +44 1138590277
    Mob: EGY. +20 1224659143

    To open your account at Trade-24 - Click here
    #1 fx-recommends, Jan 6, 2016
    Last edited: Jan 6, 2016

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