Written by Ameer Muhammad Jaffrey Monday, 01 February 2010 18:30
This time third in a consecutive week future contracts of oil prices have been trading below $74 per barrel by the dollars rise against major currencies. Due to lack of confidence in markets, the investors are selling commodities when the dollar increases versus the euro, as the 16-nation currency continues to lose ground on the back of the record Greece deficit. There has been a comparison of €/US traded around 1.3895 yesterday morning, compared to last weeks 1.4400 levels.
The US oil demand minimized 2 percent in the past four weeks from a year earlier, while Japanese data showed crude imports fell 2.6 percent in December. Therefore; financial markets have been loosing confidence in crude future trade which is 12% lower in history, mainly affected by the rise in dollar.
Analysis:
The momentum change in crude is continued trading from yesterday approximately collect together support for the bullish medium term direction appearing above. The slightly downward shorter feed continues its negative pressure on crude, but minor support levels are pushing crude and protecting the bullish direction, while maintaining to recover trade above the breached main support that is 73.95. We are closely looking the market to specify the precise direction while waiting for clear indication.
The key support of trading range is at 71.80 and the key resistance at 75.40.
The general trend is to the benefit as far as 47.20 remains together with targets at 85.00.
|
Support
|
73.40
|
72.65
|
71.80
|
71.00
|
70.15
|
|
Resistance
|
73.95
|
74.25
|
74.90
|
75.40
|
76.60
|
Recommendation:
As from the above explanations our opinion is to avoid trading unless more positive signs for the pairs for the pair’s direction might be appropriate.
