Forex Signals Brief for Dec 4: Can the Oil Bounce Continue?
Rowan Crosby • 2 min read
Monday was a busy day as markets absorbed the news from the G20 over the weekend. One of the biggest beneficiaries was Crude Oil, which has now bounced nicely off the lows at $50.
Analysts are now asking the question, ‘will it continue?’
While many of the risk-on markets, gave up some of their early gains, oil remained strong and is green in early Asian trading. The spike has been helped by the fact that Canada is looking at cutting production, while we have OPEC meeting to discuss a similar course of action.
Given the holiday on Wednesday, oil inventories will now be released a day later and any sign of tightening production levels will be another reason for an extended bounce in oil.
Elsewhere the calendar today is quite thin, so the focus will once again go to sentiment and to see if the risk-on feel can continue or whether markets will decide to take their profits quickly.
Forex Signal Update
The FX Leaders Team put together a great session on what was an excellent day for trading. The guys grabbed 7 straight winners including this mornings closed NZD/USD trade.
GBP/USD – The GBP/USD is pushing into a big technical level at 127.00. If price can break and hold and there are sellers, then I would be looking to get short.
USD/JPY – Active Signal
The USD/JPY has fallen away nicely in line with the risk-on move away from the USD. We are trading close to our take profit here and so far this signal is looking really good.
AUD/USD – Active Signal
We have the RBA interest rate decision out today, but I suspect that won’t be a market moving event. The outlook is what we need to focus on and there is always some uncertainty as to what will come. So just keep your stops tight as we head into the announcement.
Bitcoin continues to hold below the $4,000 level and there appears little buying interest around at the moment.
The real concern remains that now the price is less than the cost of mining and as a result, there is little incentive for miners. That could well see price tank even further until it becomes clear there is some level of demand at lower prices.
As I said yesterday, there was previously buying at $3,500 and we will need to test these buyers once again to see if there is still interests there. If they have dropped, then there will be little to hold up price in the short-term.