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MTrading Team • 2024-07-10

Crude Oil prints four-day losing streak ahead of EIA stockpiles

Crude Oil prints four-day losing streak ahead of EIA stockpiles

Market players lack clear directions early Wednesday, after witnessing mostly mixed trading the previous day. That said, Federal Reserve (Fed) Chairman Jerome Powell’s bi-annual testimony and downbeat China inflation allowed the US Dollar to extend the week-start gains. However, the cautious mood ahead of Powell’s testimony 2.0 and the June US Consumer Price Index (CPI) challenge the Greenback buyers amid mixed geopolitical headlines.

While the US Dollar edges higher, EURUSD remains dicey amid a quicker rise in Eurozone wages for June. That said, GBPUSD also follows suit on the UK’s political jitters and a lack of major British data ahead of Thursday’s data dump. Further, USDJPY marches toward the multi-year high marked the previous week as the Bank of Japan (BoJ) hesitates to favor further rate hikes.

AUDUSD fails to justify downbeat China inflation clues and remains lackluster but NZDUSD drops heavily on the Reserve Bank of New Zealand’s (RBNZ) dovish halt, softer China CPI and hawkish Fed talks. Elsewhere, USDCAD retreats toward the 5.5-month-old rising support line even as Crude Oil reverses the previous gains.

Crude Oil remains on the back foot for the fourth consecutive day after reversing from an 11-week high even as inventory data and demand projections keep energy buyers hopeful. On the same line, Gold price benefits from the market’s uncertainty and rises for the second consecutive day despite lacking upside momentum of late.

BTCUSD and ETHUSD printed a three-day winning streak, refreshing weekly top by the press time, as bullish technical join reduced selling pressure from miners.

Following are the latest moves of the key assets:

  • WTI Crude oil prints a four-day losing streak to refresh the weekly low near $80.80.
  • Gold remains mildly bid near $2,368 by defending the previous day’s gains.
  • The USD Index lacks clear directions after a two-day uptrend, seesaws around 105.10 as we write.
  • Wall Street closed mixed but the Asia-Pacific shares edged lower. That said, equities in Britain and Europe remain pressured during the initial trading hour.
  • BTCUSD and ETHUSD both rise for the third consecutive day to $59,100 and $3,110 respectively by the press time.
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Dicey markets, Powell’s Testimony help US Dollar to pare previous losses…

Fed Chair Powell appeared less hawkish in his semi-annual testimony the previous day but pushed back the rate cuts and showed confidence about the US soft landing, which in turn allowed the US Dollar Index (DXY) to extend the week-start recovery. Also helping the USD could be his comments on the upbeat US jobs market while also stating, “Rate cut not appropriate until Fed gains greater confidence inflation headed sustainably toward 2%.”

Additionally, mixed updates about the Gaza ceasefire talks and softer China inflation keep US Dollar buyers hopeful.

EURUSD fights the Greenback’s rebound as the Eurozone wage growth quickens in June while the European Central Bank (ECB) officials challenge further rate cuts. However, political setbacks in the bloc test the Euro price upside. On the same line, GBPUSD also hesitates to welcome sellers amid hopes of better political and economic changes for the UK on the Labour Party’s landslide victory. It should be noted that USDJPY rose for the third consecutive day while approaching the highest level since 1986 marked the last week amid softer Japan Producer Price Index (PPI) and talks of BoJ’s bond actions.

AUDUSD and NZDUSD bear the burden of softer China CPI while the Kiwi pair marks the biggest fall among the G10 members even as the RBNZ keeps the headline rates unchanged. The NZDUSD pair’s fall could be linked to the central bank’s less hawkish stand and readiness for rate cuts if needed. On a different page, USDCAD holds lower ground despite downbeat prints of Canada’s main export item, namely Crude Oil, as traders gain confidence in the Bank of Canada’s (BoC) hawkish rhetoric despite mixed data at home.

Crude Oil extends the previous week’s retreat from a multi-day top amid receding fears from Gaza ceasefire talks and expectations that hurricane Beryl won’t hurt oil supply much. It’s worth noting that higher-than-expected draw in the weekly crude oil inventories, per the American Petroleum Institute (API), and the US Energy Information Administration’s (EIA) optimistic oil demand forecast failed to renew the black gold’s buying, especially amid the firmer US Dollar.

Gold Price stays in recovery mode as mixed markets and uninteresting developments on the calendar join geopolitical headlines to fuel the anxiety among traders and direct them toward the traditional haven, especially amid mixed moves of the US Treasury bonds.

  • Strong buy: USDCAD, USDJPY, US Dollar, Silver
  • Strong sell: AUDUSD, NZDUSD, GBPUSD
  • Buy: BTCUSD, ETHUSD, Nasdaq, Gold, DJI30, USDCNH
  • Sell: DAX, FTSE 100, EURUSD, Crude Oil

OPEC report, EIA stockpiles, and Powell’s Testimony 2.0 eyed…

Looking forward, traders will witness a slightly active day ahead, mostly for the energy market, as monthly reports from the OPEC and weekly EIA stockpiles are on the calendar. The same could help the black gold to pare recent losses if the Oil cartel defends its upbeat demand forecasts and the official inventories deteriorate. Also important to watch will be Fed Chair Jerome Powell’s second round of Testimony. Should the policymaker defend his hawkish bias and optimism for the US economy, the US Dollar can well extend the latest rebound and weigh on the commodities, as well as the Antipodeans. Above all, Thursday’s US CPI will be crucial to watch and hence an absence of major moves can be expected.

May the trading luck be with you!