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Gargantuan volatility on the oil market
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S&P500 index eyes painting fresh ATH
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GBPUSD broke above another resistance, 1.2700 handle in reach?
Let's start today's analysis with the oil market, where one can observe elevated volatility since the beginning of the week. Following attacks on the refinery in Saudi Arabia that happened over the weekend, oil prices rose by more than 10%. However, despite such a spectacular increase, the situation in the long term has not changed. YTD high in the vicinity of $65 handle remains the key resistance. On the other hand, the support level to watch can be found at lows from June and August this year. As long as the price remains in between these two price zones, oil may move sideways. Currently, oil attempts to correct gainss from the beginning of the week. A pull back was triggered by information suggesting that the attacked refinery will restore its production capacity much faster than initially anticipated.
Crude attempts to erase gains from the beginning of the week(W1 interval). Source: xStaion5
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Open account Try demo Download mobile app Download mobile appThe second analyzed instrument is the US stock market index S&P 500 (US500). The wide geometric structure (yellow rectangles), that we mentioned in our previous analysis, fulfilled its range - the market reached the previous highs as expected. According to the Overbalance methodology, the market could now paint a fresh all-time high. Currently, the price sits slightly above 3000 points, and whether we see a new ATH or not will likely be determined by today's Fed decision (7:00 pm BST). However, considering only the technical point of view, the probability of further increases seems to be high. Price zone ranging around the 2960 pts handle, that limited downward move in the previous week, can be seen as the key support level.
US500 eyes painting a fresh ATH (W1 interval). Source: xStation5
The technical situation on GBPUSD chart also looks interesting. The currency pair continues recovery after failing to break below the 1.2000 handle (price dropped below the 2017 lows but just for a moment).The resistance zone at 1.2400 handle was broken recently hinting at continuation of an upward move. One should remember that the volatility on the pair is likely to be higher in the near-term due to Fed (today, 7:00 pm BST) and BoE (tomorrow, 12:00 pm BST) rate decisions.. From a technical point of view,e break above the 1.2400 handle paves the way towards the zone at 1.2700 handle, where area of previous price reaction and a downward sloping trendline can be found. However, taking into account the range of the largest correction, an upward move may extend to as high as 1.2940. Nevertheless, FX pairs tied to the British pound may look past technical structures amid Brexit headline trading.
GBPUSD delivers an upward correction (W1 interval). Source: xStation5
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