Oil at new cycle highs, dollar drops

By Peter Bukov|

Published: October 25 2021, 08:24 GMT+0

Oil at new cycle highs, dollar drops

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The WTI oil benchmark continued to rise and jumped to 84.50 during the London session on Monday, rising to the highest level since October 2014. So it looks like the 100 USD target might indeed be reached this year. 

At the same time, the US dollar continued to decline, pushing the EURUSD pair to the critical resistance at 1.1650. Should the euro jump above that level, the medium-term downtrend in the pair will likely be over, targeting the 50-day average at 1.17. The USD was down against other major currencies today, excluding the Japanese Yen.

European bourses opened lower today, but US equity futures were trading slightly higher as the earnings season has kicked off positively. The SP500 trades at all-time highs, and so does the Dow Jones. On the other hand, the Nasdaq 100 index lags slightly and needs more than 2% for new highs.

US yields continue to push higher, with the 2-year yield climbing above 0.45%, while the 10-year yield stopped near 1.65%. Traders expect the Fed to announce tapering in November, while nearly two rate hikes are currently priced in 2022.

There is no macro news on the agenda today. Therefore, volatility could be lower.

From other news, China warned Monday that new infections would increase in the coming days after the latest outbreak expanded to 11 provinces, prompting the lockdown of Ejin, a county in northwestern Inner Mongolia that has seen the most Covid-19 cases.

Source: https://www.axiory.com/market-news/oil-at-new-cycle-highs-dollar-drops