Oil Rises; Saudi Official Warns Against Speculative Short Selling【May 24, 2023】
Fundamental Analysis
Major U.S. Stock Indexes Fall Back, Failure to Agree on U.S. Debt Ceiling Negotiations
Yen buying strengthened slightly in NY session due to awareness of default risk
Saudi officials warn against speculative moves, but do not mention specific measures
AUD all around lower, approaching the lower end of the range
USD/JPY mostly unmoved, with a wait-and-see attitude and no clear sense of direction
Eurozone Manufacturing Index Shrinks, Eurodollar Slips Back
Technical Analysis
The mood is becoming more and more suspicious as the U.S. debt ceiling negotiations are not progressing. The dollar seems to have lost its sense of direction and is waiting to see where the negotiations will lead. If a default really occurs, the market will be in turmoil and the yen may appreciate sharply. Crude oil is slowly rising. Buying has been strong after a senior Saudi official made a warning comment to short-selling investors.
Pound Dollar (GBPUSD)
Analyze the daily chart of the pound dollar. The price is turning from an uptrend to a downtrend and has fallen to USD 1.2373. We consider USD 1.2359 to be an important price area to be aware of. Today, the U.K. Consumer Price Index is scheduled to be released, and the focus will be on whether or not inflation is under control. If inflation is suppressed, there is a possibility that interest rate hikes will be suspended, and downward pressure will intensify.
Since the lower mustache is extending, there seems to be a willingness to push the market lower. We would like to follow the market to see the outcome.
Estimated rangeUSD 1.234 – USD 1.25Resistance lineUSD 1.2472Support lineUSD 1.2359
NZ Dollar (NZDUSD)
The NZ policy rate is due for release; a 0.25% rate hike is expected, but the chart shape suggests a decline. It has an “inverted N” and when applied, the target price is around USD 0.6050. In a downside direction, the moving average could be a support band. Volatility increases around policy rate announcements, so caution should be exercised.
Estimated rangeUSD 0.6213 – USD 0.6312Resistance lineUSD 0.628Support lineUSD 0.6222
Crude Oil (USOUSD)
Crude oil is forming a small range, but with a slight upward trend. A major resistance zone is expected to be around USD 73.73; above USD 73.73, the possibility of another close to the moving average cannot be ruled out. The rally was triggered by a senior Saudi official’s warning against speculative moves.
On the other hand, if the U.S. economy begins to slow down, downward pressure will increase due to the awareness of demand for crude oil. Until the truth of the Saudi official’s statement is known, it is advisable to trade cautiously.
Estimated rangeUSD 69.84 – USD 74.52Resistance lineUSD 73.73Support lineUSD 72.27
Today’s Important Economic Indicators
Economic Indicators and EventsJST (Japan Standard Time)NZ Policy Rate Announcement11:00UK Consumer Price Index15:00U.S. FOMC MinutesThe next day at 3:00
*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.
Risk Disclaimer
This analysis is for educational purposes only and does not constitute investment advice. Trading forex and CFDs involves significant risk and may not be suitable for all investors. Past performance is not indicative of future results.
This analysis is for educational purposes only and does not constitute investment advice. Trading forex and CFDs involves significant risk and may not be suitable for all investors. Past performance is not indicative of future results.
