(Ipek Ozkardeskaya – Swissquote Bank Ltd)
The US futures look better after the post-Powell selloff, but the market sentiment will likely remain morose after Powell’s clear declaration that the Federal Reserve (Fed) will have no pity for the markets, and continue tightening its policy until it puts inflation on a sustainable path toward its 2% policy target. At this point, it’s difficult to get a pricing that goes against the Fed.
Happily for oil bulls, the Fed drama doesn’t concern the energy stocks, which had a good session yesterday thanks to firmer oil prices. The barrel of US crude advanced past the 200-DMA.
The European nat gas futures however slumped 20% yesterday, as Germany said its gas stores are filling up faster than planned. But energy prices remain exorbitantly high, and governments are increasingly frustrated with the skyrocketing energy prices that hammer economies and households, while putting a lot of money in energy companies’ pockets.
As a result, the European policymakers are now cooking new measures to stop the excessive rise in energy prices and decouple the price of gas from electricity. Investors will be watching how the energy companies will react to the measures
. On the data front, Germany and Spain will release the latest inflation update today. The euro is making a great effort to throw itself above parity against the US dollar, and stronger than expected inflation figures could help boosting the European Central Bank (ECB) hawks, but the topside should remain limited.
Special focus on Uber: is the company a good play in the long run, what are the short-term risks?
WTI oil outlook: Recovery keeps traction but remains weighed by demand concerns
(Slobodan Drvenica – Windsor Brokers)
WTI oil is consolidating after 4.2% advance on Monday (the biggest one-day gains since July 18), but keeping positive near-term stance, following a bullish signal on Monday’s close above 200DMA ($95.87) which capped the action for some time.
Profit-taking from a three-month fall from $123.65 to $85.35) lifted oil prices, along with improved sentiment, though investors remain concerned by high inflation which is near a double-digit level in a number of Western economies that may spark further aggressive actions in raising interest rates that would cool demand.
The price is also weighed by weakened risk appetite and increased Russia’s oil output that adds to signals of possible recovery stall.
Fresh bulls need a firm breakthrough pivots at $99.00 (daily cloud base( and $100 level (psychological/Fibo 38.2% of $123.65/$85.35) to signal stronger recovery and sideline larger bears.
Otherwise, recovery may lose traction on failure under these barriers, with return below 200DMA tio signal that bears are regaining control.
Res: 97.62; 98.25; 99.00; 100.00.
Sup: 95.87; 95.07; 94.39; 92.28.
WTI climbs higher after breaking the neckline of the inverted head and shoulders formation
(Tomasz Wisniewski – Axiory Global Ltd.)
Oil is on the run and the upswing is heavily supported by an excellent bullish technical situation on the chart. The buy signal is still fresh as it comes from yesterday, so there’s still a lot of room for buyers to extend the rise.
In the middle of August, WTI bounced off the support on the 86 USD/bbl, which was a local top in October and November last year. The bounce was not random as the price created and inverse head and shoulders pattern (orange), which is a very reliable price action formation. Oil broke the neckline of the pattern (blue) yesterday and that technically, gives us a proper buy signal. A few days before, on the 22nd of August, buyers managed to break the down trendline (red), which should also be considered as a positive factor.
Today, after the breakout of the neckline, the price is continuing to climb higher, targeting August highs. In my opinion, a buy signal is fully ON as long as the price stays above the neckline of the inverted head and shoulders pattern.