Crude Oil, US Dollar, US CPI, Federal Reserve, US Dollar/Chinese Yuan – Talking Points
- raw oPrices il find support After the US consumer price index exceeded expectations
- APastock c You get stressed as higher-rate reality kicks in
- If the Fed tightens the screws further, where will it leave WTI??
Crude oil found support overnight in the face of a stronger US dollar after the US YoY CPI came in at 8.3%. It beat expectations by 8.1% but was lower than the previous annual figure of 8.5%. Crude oil has since declined in today’s Asian session.
After the CPI number, Wall Street resumed its decline overnight with the Nasdaq advancing, down more than 3%. Asian stocks followed the lead and are all in the red today.
After the CPI number, St. Louis Fed President James Bullard said that 50 basis point hikes seemed appropriate and 75 basis point was not the base case.
The market priced in a 50 basis point hike at the June, July and September FOMC meetings.
former federation Reserve Bank of New York President Bill Dudley Heavier also the Fed will be more aggressive, calling on the Fed to raise its post-neutrality level.
In the wash-down period, Treasury yields fell again as the trend toward quality continued. 10, 20 and 30 year notes were 7-8 basis points lower in yield.
Despite signs of persistent inflation, gold remains flat at around $1,852 an ounce. The price of iron ore and industrial metals in general had a quiet day after the recent weakness.
The USD/CNY pair resumed its rally north, trading above the 6.7600 level today.
Federal Reserve Bank of San Francisco Later today, President Mary Daly is scheduled to speak.
You can view the full economic calendar here.
Technical Analysis of West Texas Intermediate Crude Oil
Crude Oil continues to trade within a wide range after rising 5.96% yesterday.
This sustained stability witnessed days 10, 21 and 55 Simple Moving Averages (SMA) converge near the current price.
This consolidation saw lower volatility as evidenced by the narrowing of 21 days Simple Moving Average (SMA) based onBollinger Bandss.
Resistance could be at the previous highs at 111.37, 116.64, 129.44 and 130.50.
On the downside, support may lie at 95.28, 93.53, 92.93, 90.06 and 87.46.
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— By Daniel McCarthy, Strategist for DailyFX.com
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