WTI

The tail risks of a failure for OPEC+ to reach an agreement is on the rise, presenting an underappreciated potential for even more volatility in the crude oil market...

Crude oil analysis: Investors await OPEC+ meeting on Nov 30. We expect rollover of Saudi and Russia cuts, which could help to support prices. WTI needs an interim higher high above $77.60-$78.50 to signal trend reversal after intense selling over the past several weeks.

A sharp reversal on USD/JPY last week brings a potential break above 150 in to focus, assuming the US dollar can find a bid and USD/CNH continues to hold above its 200-day MA. Meanwhile, crude oil has handed back all of its 2023 gains and it is a very fine line before the bias for a move to $80 becomes invalidated.

Thanksgiving in the US has made for a very quiet second half to the week for traders, but with a key US inflation report and an OPEC meeting on tap then volatility is expected to return next week. Also note that Australia releases inflation figures which could be the deciding factor as to whether the RBA hold or hike at their final meeting of the year.

The US dollar held a key support level on Thursday, which could provide the platform for a bounce today if all goes well. Crude oil continues to hint at its own potential bounce, whilst the ASX 200 appears to have formed a swing high on the daily chart.

Gold has formed a double top around $2000 which leaves the potential for a pullback before its next leg higher. And crude oil shows the potential for a bounce towards $80 or $82 ahead of next week's OPEC meeting.

What does the OPEC+ delaying meeting means for oil prices? And GBP/USD is in focus as pound drops after autumn statement. But was that because of the overall recovery in US dollar, following the release of mostly stronger data?

Both WTI and Brent crude oil could rally further from here after breaking out of their bearish channels...

Crude oil outlook boosted above all by OPEC+ supply cuts/ Supply fears re Middle East could intensify again. Oil prices are demand inelastic, which means downside should be limited from fears about weakening global economy.

Whilst traders remain net-long EUR/USD futures, there are early signs of a turnaround in sentiment with asset managers increasing bullish exposure and prices holding above 1.05. Despite higher WTI prices, large futures traders continued to reduce their long exposure while managed funds have increased their shorts.. Perhaps not too surprisingly, asset managers flipped back to net-long exposure to gold and silver futures last Tuesday.

Geopolitics, inflation reports and sentiment towards Chinese markets will likely dominate proceedings for AUD/JPY and crude oil this week, putting their respective uptrends to the test during a time when investor risk appetite is particularly weak.

WTI crude oil has pulled back into the support zone highlighted in yesterday's report for a potential move to $90. We also look at GBP/AUD, as it may have printed a multi-month top and the daily chart also appears on the cusp of a breakdown.

Welcome to another edition of Technical Tuesday, a weekly report where we highlight some of the most interesting markets that will hopefully appease technical analysts and traders alike. In this week’s report, we will get technical on crude oil, USD/CNH, EUR/USD and bond yields.

AUD/USD managed to hold above 63c last week despite risk-off trade, and now momentum has turned higher we see the potential for it to extend its gain, so long as sentiment remains in check. Oil also shows the potential to head for $90, as long as a key support area holds over the near-term.

Following the 5% rise on Friday, crude oil prices gave back some of those gains on Monday. However, this could be a temporary respite before oil prices rise again.

Given how quickly sentiment can change and the level of risk we’re confronted with, it’s difficult to see crude and gold being anything other than buy-on-dips prospects until we see a de-escalation of hostilities.

Open interest has fallen notably on USD/JPY since its failed ‘bid’ for spot prices to break and hold above 150. And that further suggests a glass ceiling for prices. Japanese yen futures also saw grow longs increase by 19.6%, although traders remained heavily net-short.