The price of oil is continuing to fall. The phase of sales on the commodity market is now stretching into its eighth consecutive session and doesn’t look like stopping. The significant May minimum of around $43.33 was updated yesterday. The morning trades were going lower and this is opening up the chance for a shift to $42. Due today’s decisions from the BoJ in regards to relaxing their monetary policy, oil could continue to drop lower. The season of increased US demand for energy is coming to an end and reserves are starting to increase due to demand remaining low throughout the world. It’s difficult to ignore such data. From a technical analysis point of view, the support levels are now at $42.87 and $40.60.
Gold is up, but movements on it aren’t so positive as they could be. A troy ounce costs $1,337.9 (+0.4%) today. According to data on trader positions, buyers of gold today are 64% against yesterday’s 80%. The market could react to the end of the season for central banks meeting with a fall in demand for this safe asset. However, whilst oil is being sold at the rate it is, gold will continue to gradually rise.
A barrel of Brent today will trade in a range of $42.80-$43.45 range, with the bears’ positions looking more favourable than the bulls’. The sellers have convinced themselves of a continuation of the fall in oil this year. If they manage to push the price down any further then January’s run of a 10-session series of sales will be updated.
The Asian markets today are down. The Nikkei 225 has fallen by 1.0%. The ASX Australia is down 0.3%. The Shanghai Composite has decreased 0.07%, and the Hang Seng is down by 0.8%. Futures for the S&P500 are trading below the closing level of the previous trading day. The markets are concerned by the BoJ’s July decisions in which the land of the rising sun decided to further relax their monetary policy. Asset purchasing is to remain at 80 trillion yen per year. ETF purchases are to be expanded to 6.0 trillion yen per year (previous: 3.3 trillion yen). Dollar credit financing is to grow to $24 billion from its current $12 billion. The interest rate is to be kept at -0.1%, although it was expected to be reduced to -0.2%.
The USD on Friday morning was continuing to fall against the CNY. The fall has been happening for three days in a row. The USD/CNY is now going for 6.6510 ( a fall of 0.0042 or 0.06%). From a technical perspective, the instrument could drop to 6.6448, a July minimum, whilst the market is getting its head around central bank decisions and keeping an eye on oil prices. The EUR/USD is slightly up on Friday morning, with trades being conducted at around 1.1080. Yesterday’s statistics from the US regarding initial unemployment benefits showed a slight rise, but the report’s components show that there’re no real reasons for a worsening of the indicator. The four-week moving average has jumped slightly in the index. Europe is to publish stats on June unemployment today, along with preliminary inflation figures for July. The US is releasing preliminary GDP data for Q2 of 2016. Forecasts reckon that the US economy has expanding 2.6% QoQ against a 1.1% quarterly rise at the beginning of the year.