WTI Oil lurches to new 12 year low

The mounting anxieties over Iran’s looming sanction relief which may open doors to more oil exports has threatened WTI oil and led to the commodity sinking to fresh 12 year lows at $29.40 on Friday. Oil experienced a very turbulent start to 2016 and remains victim to a ceaseless theme of an aggressive oversupply in the markets, while rising concerns around slowing global growth have renewed fears that demand may be waning. A strengthening US dollar has added to oil’s woes, while investor attraction periodically diminishes as escalating tensions between Saudi Arabia and Iran thwart any remaining hopes of a production cut. This commodity is extremely bearish and with no signs of an emergency OPEC meeting forthcoming weighing heavily on sentiment, sellers may be encouraged to send prices towards $29 and possible lower.

From a technical perspective WTI Oil is heavily bearish with prices crashing to fresh 12 year lows in Friday’s trading session. Previous psychological support at $30 may become a dynamic resistance which should invite an opportunity for bearish investors to send prices to $29. A solid daily close below $30 may suggest a further decline towards the lows of April 2003 at $25.

Today the focus will be turned toward the US sales report, in which investors will be perusing the health of the US economy and to assess whether US consumers have begun to spend following the significant savings on gas and a sturdy labour market. If the sales report is firm and exceeds expectations, then the bullish sentiment towards the Dollar may receive an uplift as consumer spending accounts for two-thirds of the US economy. A positive sales report that shows a healthy US economy may also offer the Fed another compelling reason to raise US interest rates once more before the end of this quarter.

Gold balances above $1075
Gold bulls have been struggling slightly in Friday’s trading session with prices currently meandering above the sticky $1080.0 level as of writing. Despite the risk averse trading environment, this precious metal remains bearish and Thursday’s hawkish comments from the president of the US Federal Reserve suggesting the potential of further US rate hikes in the future should heavily cap how high prices can rise. A strong Dollar may be the trigger for Gold to decline further and if retail sales exceed expectations today then bearish investors may be offered an opportunity to send prices towards the $1060 support.

USDCAD
The USDCAD is heavily bullish on the daily timeframe as there have been consistently higher highs and higher lows. Prices are trading above the 20,50 and 200 SMA while the MACD also points deep into the upside. The current momentum may take prices to the next relevant resistance based at 1.4700.

CADCHF
This pair remains technically bearish on the daily timeframe as long as prices can keep below the 0.7050 resistance. Prices are currently below the daily 20 SMA and the MACD has also crossed to the downside. Seller may be encouraged to send the CADCHF towards 0.6850.

Disclaimer: The content in this article comprises personal opinions and ideas and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. FXTM, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Risk Warning: There is a high level of risk involved with trading leveraged products such as forex and CFDs. You should not risk more than you can afford to lose, it is possible that you may lose more than your initial investment. You should not trade unless you fully understand the true extent of your exposure to the risk of loss. When trading, you must always take into consideration your level of experience. If the risks involved seem unclear to you, please seek independent financial advice.