Oil Shows No Signs Of Recovery
Axi | Dec 19, 2018 12:16
Originally published by AxiTrader
There are only seven trading days left in this year, and volatility in the FX market has already declined. While stocks and commodities still have noticeable price swings, the major FX pairs have been stuck in a range. There is a chance that the Federal Reserve press conference tomorrow could jolt the market, but that is far from guaranteed.
Which charts could be worth keeping an eye on towards the end of the year?
WTI has broken below a significant support at $50 - both technical and psychological. Despite the oversold conditions, it might take a while until the oil price stabilizes. The charts suggest that a test towards $41.50 could follow soon. To the topside, expect heavy resistance ahead of the $50 level.
In the meantime, gold is benefiting from both lower US rate expectations and a general risk-off sentiment in the markets. XAU/USD is still struggling with the resistance at $1250 though, and bulls will need a clear break above that level to take control. In such a scenario, there could be a recovery rally towards $1300.
While most FX major pairs are consolidating at the moment, AUD/JPY could prove to be a more interesting currency pair. The Japanese yen is benefiting from position covering (speculators covering their yen short positions) and the risk aversion in the market. AUD/JPY was rejected at the 200 DMA, and in the short-term, another test of $80 support seems likely.
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