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Daily Technical Analysis by FxGrow


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#701
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FxGrow Daily Technical Analysis – 19th Jan, 2017
By FxGrow Investment Research Desk

Crude Oil Levels Between OPEC-Compliance and US Inventories Today
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Oil prices are ebb and flow between OPEC-compliance efforts to curb market surplus and US consecutive additional drilling to glut the market.

For the first time in 15 years, beginning of Jan, OPEC and several producers settled last year to cut supply which boosted oil levels to spike at 55.22 from a 27$ a year ago. The key here was how far will this agreement last and the commitment of respecting agreed share-quotas. On 2017, hints were sent that some countries are not respecting the settlement signs of cheating were fed to markets which caused oil bulls to take a breath, and slow the hike pace. In Nov-2017, OPEC made the final touches on the plan to cut its output around 1.20 MB per day to 32.50M. Russia, combined with other non-members pledged curbs around 560,000 bpd in Dec.

The biggest reduction came from Saudi Arabia, which told OPEC it cut output to 10.47 million bpd. Losses in Nigeria, which is exempt from cutting output because its production has been curbed by conflict, provided the second largest reduction.

The OPEC figures published on Wednesday showed the group pumped 33.085 million bpd last month, according to figures OPEC collects from secondary sources, down 221,000 bpd from November. According to  Reuters. In short words, OPEC deal is falling into puzzles but perhaps on slow pace but the target will be achieved supported by analysts due to a significant increase in energy sectors specially china.

Oil levels are heading to $60 by mid 2017 according to Tarek Fadlallah, Nomura Middle East chief executive officer, as he discusses the outlook for the U.S. dollar and oil prices with Bloomberg's Shery Ahn and Yousef Gamal El-Din on "Bloomberg Markets: Middle East." (Source: Bloomberg).

In conclusion, oil prices declined as US decided to increase its stockpiles although some OPEC countries reduces production. OPEC and US are on opposite target terms since OPEC has the benefit of higher oil prices considering it's their main source of economy wealth and US is the largest energy consumer sector. Therefore a global supply glut remains a big concern awaiting further deals from OPEC members.  

Markets are always on a weekly report with US crude inventories, today at 4 PM GMT, with further efforts to affect oil levels. On the other hand, China also plays a big role on oil demand knowing that it is the second largest consumer thus slower demand might be a result of weaker economy.

Remark : Look forward for US inventories today, a positive data will help oil prices to collapse to S1 51.13, S2 50.48, S3 49.82. The other scenario, in case of negative inventories not meeting forecasts, markets to expect bullish wave powered by disappointment and OPEC efforts towards R1 52.06, R2 52.94, R3 53.94.

For more in depth Research & Analysis please visit FxGrow.

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.


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#702
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FxGrow Fundamental Analysis – 20th Jan, 2017
By FxGrow Investment Research Desk

Market Volatility Pledged on Trump's Speech

Talk of the week, Trump's receiving the US presidential ribbon and how the market will react on his speech. But before that, let's go back in time and put puzzle pieces to one place to draw a clearer picture.

1- First on 3rd of Dec, US index rallied significantly ceiling 103.81 2003-fresh-highs, showing how strong USD is but the pace is critical. The next day, Wednesday the 4th, US index was on a date with FOMC meeting which resulted with briefing that US index is relatively high. Also, it could lead to inflation which is a nightmare for central banks. As a result, US index took a dip to 101.30.

2- This week, market awaited 2 speeches for Mrs. Yellen, head of US FED. First meeting was on Wednesday where Yellen boosted collapsing US index by positive speech, lifted US index to 101.33 high and the daily pivot was 100.88. The second speech was today early morning which didn't introduce new perspective for USD, and US index clocked a low 100.83. US index has a strong support level at 100.80. Now if we compare the three numbers, we can conclude that at these levels, the US Fed is satisfied and it's meeting their objectives.

Now comes today's long waited event, Trump's speech. There are three scenarios that can cross minds.

1- Trump, as his previous behavior, will make an attack on US local sectors resulting in US stocks collapse as well for US index.

2- Trump will make a speech matching the prestige of US presidency. A patriotic speech where he'll address US citizens with promise of good and strong economy that will result in energizing USD levels.

3- The event itself, a new president taking the lead despite the content of the speech will also send an optimistic wave through the US market that will boost USD.

In conclusion, whether Trump and Yellen are on the same page or not. Collapsing or bullish US index, the FOMC or Yellen will always try to make keep US index in the above mentioned levels where its meeting their inflation target.

Remark : This is a theory based on fundamental and technical analysis.

For more in depth Research & Analysis please visit FxGrow.

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.


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