WTI crude oil, ASX 200 analysis: Asian Open – 26/09/2023

Market Summary:

• The long end of the US yield curve continued to surge on Monday, sending the 30-year yield to a 12-tear high of 4.64%
• Germany’s business sentiment soured for a fifth consecutive month according to the Ifo survey, sending EUR/USD and DAX to fresh 6-month lows, and helping the US dollar index close to its highest level since November
• USD/JPY reached an 11-month high and within pips of the 149 handle, although BOJ Governor Ueda remined speculators that it is important for FX to move stably to reflect fundamentals
• The Bank of Canada’s (BOC) monetary policy minutes revealed members debated a pause of a hike, alongside concerns that markets may misinterpret their recent hold that hikes were done and cuts would be their next move. This essentially tells us that the BOC will retain a hawkish bias over the coming meetings, and keep the door open to further hikes to dampen any dovish expectations. The Canadian dollar was one of the few currencies with withstand USD strength, and saw USD/CAD close beneath the 200-day EMA.
• In a statement that could give Captain Obvious a run for their money, Moody’s warned that a US government shutdown would be bad for their credit rating
• Gold was slightly lower on Monday and price action remains choppy on the daily chart, and trapped between the 200-day MA (yesterday’s resistance) and above the 200-day EMA ~1913.
• The same could be said for WTI crude oil, which is meaning around $90 after pulling back from its shooting start candle it formed around $92.50 last week. This is typical of corrective price behaviour and points to tricky trading conditions ahead.

 

Events in focus (AEDT):

• 09:50 – Japan’s corporate services price index
• 15:00 – BOJ CPI
• 15:00 – Singapore industrial production
• 22:00 – US building permits
• 23:00 – US house price index
• 00:00 – US consumer confidence (Conference Board)

 

ASX 200 at a glance:

• The ASX 200 cash index formed a second daily consecutive (although much smaller) bullish pinbar on Monday, to show demand above 7,000
• SPI 200 futures are a touch lower and the ‘positive’ lead from Wall Street was on the weak side
• Whilst we see the potential for the ASX 200 to drift higher as part of a retracement against last week’s losses, bears may want to seek area of resistance to fade into
• 7100, 7135 and 7200 are key levels we’re keeping an eye on for evidence of a swing high

 

WTI crude oil technical analysis (daily chart):

Price action remains choppy on WTI crude oil’s daily chart after printing a shooting star candle last week formed ~$92.50. This is typical behaviour of a correction and may take a new catalyst to either send it back to trend move of prompt a deeper pullback with cleaner price action. This is also allowing the RSI (14) to pul back from overbought levels. However, we can at least see that the characteristics if of price action has changed compared to the strong, clean rally into $92.50 and adjust accordingly; traders can either seek intraday opportunities within the typical daily range, or wait for evidence of a swing low.

 

If prices continue lower, an area to seek a potential swing low could be around $87 which marks a high-volume node formed during its rally into $92.50. That could either interest bears as a potential target, or for patient bulls looking to re-enter the market at a discount. The lower trendline is another area of interest for potential support.

 

 

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge