OIL: Oil Set for Weekly Gains on EU / Russian Tensions
- WTI is up by +0.20% in Asia today, consolidating gains and on track for weekly gains of over 3%.
- Brent is up also today, by +0.13% and over 4% for the week, triggering key technical levels and reaching highest levels since early August.
- Despite the realities of the increase in supply from OPEC+ members, the focus for oil for the week has been the mounting tensions between EU members and Russia.
- EU leaders have been clear in their message to Russia that a NATO alliance would be ready to respond to repeated violations of European airspace by Russia, predominantly with drones.
- This comes after President Trump said this week that NATO should shoot down any Russian aircraft that cross into European space. US Defense Secretary Pete Hegseth ordered an urgent meeting of top military commanders for an unusual meeting early next week, fueling concerns over wider unrest that could imperil global crude flows.
- This political tension has given a bid to oil with a strong start to the trading week, though signs overnight that that strength is waning.
- Iraq's long standing disagreement with the Kurdistan region is close to ending after the federal government approved a deal that will see crude from Kurdistan be delivered to Iraq's state oil marketing company SOMO, which will handle shipments through a pipeline to Turkey's Ceyhan port. The resumption of shipments will add 230,000 barrels a day to international markets, rising to as much as half-a-million barrels a day in the future.
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EURUSD TECHS: Monitoring Pivot Support At The 50-Day EMA
- RES 4: 1.1851 High Sep 10 2021
- RES 3: 1.1829 High Jul 01 and the bull trigger
- RES 2: 1.1789 High Jul 24
- RES 1: 1.1743 High Aug 22
- PRICE: 1.1616 @ 06:10 BST Aug 27
- SUP 1: 1.1599/1.1528 50-day EMA / Low Aug 5
- SUP 2: 1.1392 Low Aug 1 and bear trigger
- SUP 3: 1.1373 Low Jun 10
- SUP 4: 1.1313 Low May 30
The trend set-up in EURUSD remains bullish and short-term weakness is for now considered corrective. However, the pair is trading just ahead of a key support at the 50-day EMA, at 1.1599. A clear break of the average would signal scope for a deeper retracement and potentially expose key M/T support at 1.1392, the Aug 1 low. For bulls, a stronger resumption of gains would open key resistance and the bull trigger at 1.1829, the Jul 1 high.
BUND TECHS: (U5) Resistance Remains Intact
- RES 4: 130.26 High Aug 8
- RES 3: 130.06 High Aug 14
- RES 2: 129.78 50-day EMA
- RES 1: 129.55 High Aug 21 and 22
- PRICE: 129.45 @ 05:49 BST Aug 27
- SUP 1: 128.64 Low Aug 15
- SUP 2: 128.40 Low Apr 9
- SUP 3: 128.19 Low Mar 27 (cont)
- SUP 4: 127.83 76.4% retracement of the Mar 11 - Apr 7 bull leg (cont)
Bund futures continue to trade above their recent lows. A bear threat remains present. The contract recently breached 128.84, the Jul 25 low and a bear trigger. Note that the 129.00 handle represents the base of a broad range. A clear range breakout would strengthen a bearish theme. This would open 128.40 initially, the Apr 9 low. Strength above the 50-day EMA of 129.78, is required to signal a reversal.
ASIA STOCKS: Strong Day of Gains for Major Regional Bourses
The recent uptrend for China's stocks continued today with major bourses delivering gains as markets turn their attention to Nvidia's earnings and the US inflation report to come. Tech shares in the region remain strong with key AI companies in focus.
- The NIKKEI is up +0.29% today, attempting to recover from yesterday's falls of nearly 15.
- In China, whilst the Hang Seng hovered around where it opened, the onshore offshore divide continues with the CSI 300 up +0.72%, Shanghai up +0.33% and Shenzhen one of the best regional performers up +0.80%.
- The TAIEX in Taiwan rose +0.74% to mark three days of gains of just over 3%.
- The KOSPI ignored better than expected retail sales and ahead of the BOK decision is only marginally higher on the day.
- In South East Asia, the FTSE Malay KLCI is flat, whilst the Jakarta Composite is up +0.30%.
- In the Philippines, the PSEi is one of the best regional performers ahead of the BSP decision, up +1.3%.
- The NIFTY 50 in India is closed, having finished yesterday down heavily by -1%,
