Oil slides below $71.00
After sliding 3% in the previous session oil prices are on the back foot again. Concerns over coronavirus curbs combined with slowing factory activity in China and the US, the world’s largest importers of oil, saw oil book its largest daily loss in 2 weeks.
With covid cases also on the rise in China, concerns are growing that further mobility restrictions could be brought in.
This concerns come following data yesterday that revealed that factory activity in China, as measured by the Caixin Manufacturing PMI declined to 50.3, just above the 50 level that separates expansion from contraction, versus 51 expected.
The US ISM manufacturing PMI for July dropped to 59.5 versus 60.4 forecast.
API inventory data is due today and are expected to have declined for a third straight week.
Where next WTI oil prices?
WTI oil failed to break above its month old descending trendline resistance last week, falling lower to support at 7040 yesterday’s low. The price trades below its 50 & 200 sma on the 4 hour chart.
The RSI is supportive of further losses, in bearish territory, pointing lower but out of oversold territory.
A break below yesterday’s low of 7040 could open the door to 6980 July 22 low and then a deeper sell off.
Any recovery would need to retake the 50 sma at 71.00 and the 200 sma at 72.44 in order to attack 74.00.
Dax consolidation continues
European stocks are set for a mixed open as investors weigh up corporate earnings against concerns that Chinese regulatory authorities will turn their attention to the gaming industry.
The automobile industry will be in focus after BMW posted better than expected Q2 profits versus a loss in the same period last year.
The economic calendar is light with just Eurozone PPI which is expected to reveal a 1.4% MoM increase. Annually PPI is expected to reveal a 9.6% increase.
Where next for the Dax?
The Dax failed to break above resistance at 15700 in the previous session rebounding lower and falling through its 50 & 200 sma on the 4 hour chart as it continue to consolidate.
The price is currently trading on the 50 & 200 sma. The RSI is also neutral at 50.
Buyers could be looking to for a breakout trade above 15700 yesterday’s high in order to head towards 15800 and fresh all time highs.
Sellers would be looking for a move below 15415 to gain traction.