Oil keeps dropping

By Tomasz Wisniewski|

Published: February 23 2023, 08:34 GMT+0

Oil keeps dropping


Wednesday was a rather quiet day on the market, important mostly for indices as they are currently trading above major, mid-term supports. S&P 500 managed to defend a long-term up-trendline that’s been here since October, while DAX defended horizontal support on the 15250 – a key level in February. All that happened with some support from yesterday’s FOMC Minutes.

They read that we are still substantially worried about the inflation, but the Bloomberg sentiment model suggested the minutes to be the most dovish they have been in two years. This claim is slightly in contrast with the recent hawkish tone from Jerome Powell. Yesterday, most of the indices dropped but today, the futures start on the green side of the market. Thursday might possibly bring a bullish correction on the indices.

The calendar today serves only one set of Tier-1 data, the Prelim GDP from the US expected to come at 2.9%. We will also learn the inflation number from the Eurozone – the final reading that almost always comes in line with expectations, this time being at 8.6%.

The strongest currencies at the moment are the Australian and New Zealand Dollar. This was the case for the NZD yesterday as well, as it was strongly supported by the recent hawkish statement from the RBNZ. The American Dollar remains pretty strong, with an exceptionally nice session yesterday. Traders on the EURUSD should pay attention to the 38,2% Fibonacci line which is currently being attacked by the sellers. A further slide can give us a proper signal to go short.

Oil had a pretty worrying session yesterday with the price dropping by 3%. The slide is technically significant with the price of the Brent currently breaking the lower line of the flag after the previous bounce of the long-term down trendline. Both of the events may be considered bearish and thus, in my opinion, new mid-term lows on the chart oil are just a matter of time.

Source: https://www.axiory.com/analytics/market-news/oil-keeps-dropping