Oil slips on Ukraine peace hopes
- Trump–Zelensky meeting brings peace with Russia a step closer
- Powell's speech at Jackson Hole is also in focus
- Oil trades below 50 & 200 SMA
Oil is edging lower as traders evaluate diplomatic developments and signals towards ending the war between Russia and Ukraine
Ukrainian President Zelensky had a positive meeting with President Trump and European leaders surrounding security guarantees for his nation, which will likely be worked out in the coming weeks. A trilateral meeting between Trump, Zelensky, and Putin is the next step towards peace and is expected to happen in the coming weeks. As a result, risk premiums on oil have eased.
Oil traders are also watching Fed rate cut expectations closely after cooler-than-expected CPI but hotter-than-expected PPI data last week. The market is pricing in around an 85% probability of a September rate cut with another cut likely before the end of the year.
Attention will also be on Powell’s Jackson Hole speech for confirmation or further easing. The prospect of further easing could fuel a rebound in WTI.
Oil forecast- technical analysis
WTI trades below a multi-year falling trendline after failing to break out in July. The price trades below the 200 and 50 SMA and the RSI is below 50, confirming bearish momentum.
Immediate support is at 60, the June low. Below here, 55.50 comes into focus.
Buyers would need to rise above the 65 resistance zone and 67.70, the 200 SMA, to head towards 70. A rose above here creates a higher high.
DAX edges higher with Russia-Ukraine peace deal, PMIs & Jackson Hole in focus
- Optimism surrounds the Ukraine-Russia peace deal
- Some caution is showing ahead of PMI data & Jackson Hole Symposium this week
- DAX consolidates around 24,300
The DAX is edging higher around the 24,400 level as optimism surrounding a Russia-Ukraine peace deal was offset by caution ahead of this week's PMI releases and the Jackson Hole symposium.
Investors continue to weigh up the possibility of a peace deal between Russia and Ukraine after an encouraging meeting between Zelenski and Trump at the White House. Trump told his Ukrainian counterpart that the US would help guarantee Ukraine's security in any peace deal to end the war.
I trilateral meeting is expected with Putin within the next few weeks to begin negotiations.
The defence sector is under pressure following the developments amid hopes for de-escalation, which would reduce the need for military assets.
The Eurozone economic calendar is quiet today. However, attention will be turning to PMI and GDP data later in the week, which could highlight the slow growth in the region.
Attention will also be on the Jackson Hole Symposium for more clues around the outlook for Federal Reserve policy.
DAX forecast – technical analysis
DAX continues to consolidate, caught between the 50 SMA around 24,000 and its record high of 24,650. The RSI is modestly above neutral. The setup lends itself to a breakout trade.
Buyers will look to rise above 24,650 to create a higher high.
Sellers will look to break below the 50 SMA around 24,000 to open the door to 23,700, the August low. A break below here creates a lower low.
