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WTI Oil
WTI oil price remains in red for the third consecutive day and accelerated lower on Tuesday, losing about 2% of its value during Asian / early European trading.
Oil price was initially deflated by optimism about potential US-China trade deal that stalled earlier strong rally sparked by US sanctions on two biggest Russian oil producers.
The latest signals that OPEC+ will further increase production in December (the cartel members will hold online meeting on Sunday), added to more pressure on oil prices.
Fresh bears cracked important support at $60 (psychological / Fibo 38.2% of $55.96/$62.58 upleg / 20 DMA) but faced headwinds at this zone that so far prevented break lower.
Significance of the support and oversold hourly studies contributed to slight bounce, which rather marks consolidation, as daily studies are predominantly bearish (negative momentum / stochastic emerging from oversold zone / MA’s in mixed setup) and likely points to bearish continuation scenario.
Firm break of $60 trigger to expose targets at $59.27/12 (50% retracement / 10 DMA).
Conversely, ability to hold above $60 to temporarily sideline bears, while bounce and close above $61.00 zone (broken Fibo 23.6% / 30DMA) would provide relief.
Equity markets through Asian and Europe have taken a turn today, with stocks losing traction ahead of a period of huge economic and corporate upheaval. Notably, the Nikkei steam train appears to have run out of fuel for the time being, with the index taking a breather after pushing through 50k yesterday.
Talks between the new Japanese PM Takaichi and Trump resulted in a deal to strengthen the US’ access to rare earth minerals, following on from a similar deal with Australia. Notably, Trump even went as far as to remark that “anything you want, any favours you need, anything I can do to help Japan, we will be there,” calling them “an ally at the strongest level.” Nonetheless, with the Bank of Japan rate decision raising question marks over whether we are on the cusp of a hawkish turn that sets the stall for further rate hikes, it looks like the so-called Takaishi trade could be on hold over the coming days.