US Market Wrap

It might have been a new day, but the headlines were the same with all the attention on the oil price at the moment.

The April, WTI contract managed to settle at around $10, which was a sharp increase on the -$40 we saw only a day earlier. Unfortunately for the oil bulls, the next contract in line got hit as well and prices are now trading around the $13 handle.

With the current shutdown on the back of COVID-19 balancing health with the economy, there doesn’t appear to be any real respite on the way for the likes of oil producers which is a worry. As we know, we are seeing pressure on both the supply and demand side of the equation and that is not often a good combination.

The risk-off mood found its way into the stock market once again with the SPX slipping into the red for another day. While the likes of the GBP/USD are finally starting to feel the pinch as well. Clearly the impact will be widely felt.

Most of the majors were not helped by money starting to flow back into the Greenback as investors look for somewhere to hide at the moment. But that said, there would be plenty of economies and central banks at the moment that would love seeing their currencies falling.

The Data Agenda

Funnily enough, yesterday’s data wasn’t all that bad and that is telling me that the true economic impact of this shutdown isn’t being clearly indicated just yet and there is some lag in the data.

One number that will be current and is a must-watch will be today’s WTI crude oil inventories.

As the supply glut grows and demand dries up, this could be a number that breaks the oil market. We’ve already seen two days of extreme selling and in truth more like two weeks.

So a big build today, could be the nail in the coffin.

Elsewhere, keep an eye on CPI out of Canada and the UK and the respective pairs the USD/CAD and GBP/USD.

Forex Signal Update

The FX Leaders Team closed two signals in the red yesterday as we mostly stayed away from the volatility.

Oil – Pending Signal

WTI keeps on falling and at this stage, every pullback is met with more selling pressure. Volatility remains high, so we will keep looking for the lowest risk entry we can find to the short side.

SPX – Watching

The SPX seems to be entering into another down leg after a period of buying. How much pressure we’ll see on this leg lower remains to be seen, but we will keep a close eye out for any opportunities.

Cryptocurrency Update

BTC has been a little bit overshadowed lately by the likes of oil, however, it is important to note that the $7,000 level is holding as key resistance.

Along with other risk assets, price has fallen away over the last 24 hours, but for the most part, still remains stuck in a tight range.