Summary:
- OIL price continues to rally, hits 4-year highs
- US30 flirts with all-time highs
- USDPLN at the key support ahead of the FOMC meeting
Oil prices keep surging without any sign of weakness. The $80 resistance for Brent could have been looking solid as the price backtracked from it in the past but this time the bulls managed to break it with ease. The reason for this move is the OPEC’s attitude towards the current supply situation. President Trump, who broke the deal with Iran, forcing a drop in the country’s output, urges the OPEC to provide alternative supplies. However, the cartel refuses, suggesting that the market remains “balanced”. Since the sanctions are still about to kick in, traders are concerned about a short-term supply situation. Media has actually started speculation whether prices could rally towards the $100 psychological threshold. On the chart the outlook is firmly bullish – prices are above the trend-line and moving averages and a broken area just below $80 mark can now act as a support level.
OIL has just broken the key zone at $80. Source: xStation5
US stocks have been incredibly immune to any sort of risks present on the markets. Trade Wars, emerging market crisis, Fed hiking rates – all these factors are consistently being ignored by the Wall Street bulls. Now the US30 (DJIA30 futures underlying) is hovering around all-time highs just a day ahead of the FOMC meeting. Although the market could be somewhat overbought, traders can look towards moving averages for the support – especially the 200-day average acted like this in the past.
Can US30 keep surging after marking fresh all-time highs? Source: xStation5
USDPLN can be the most interesting technically out of those three. The pair used to be in an uptrend sequence for a while with a series of higher lows and higher highs. That sequence has been breached with a recent lower high. Now a lower low would be required for a downtrend to emerge. A break of 3.64 is a precondition for a further sell-off, this zone acted as a support before. The moment of this analysis is special – the Fed’s decision will have an impact not just on the dollar but also emerging currencies, so USDPLN will be affected from both directions. Remember that the hike has been priced in and reaction could rely on the guidance.
