Trade Idea - Oil
EURO, CRUDE OIL, CHINA, RUSSIA, UKRAINE, FED, RATES – TALKING POINTS: LINK TO ARTICLE
- China signals opposition to Russian invasion of Ukraine, cooling market fears
- Fed rate hike outlook moderates after key officials call for gradual tightening
- Crude oil prices testing below $90/bbl after undoing last week’s pivotal break
The Euro rose alongside S&P 500 stock index futures – a bellwether for market-wide risk appetite – amid renewed hopes for a diplomatic solution to the crisis brewing at the border between Russia and Ukraine. That is after China’s Foreign Minister Wang Yi signaled Beijing’s opposition to any would-be invasion of the latter country by the former at the Munich Security Conference over the weekend.
Mr Wang’s language was unambiguous. “The sovereignty, independence and territorial integrity of any country should be respected and safe-guarded,” he said, pointedly adding that “Ukraine is no exception.”
That goes a long way to clarify Beijing’s stance after President Xi Jinping issued a joint statement with Russia’s President Vladimir Putin opposing NATO expansion just earlier this month.
Sino-Russian relations have blossomed recently. Trade between the two countries surged to a record of nearly $147 billion in 2021, up almost 36 percent from the prior year. With China weighing in against Russian military action in Ukraine alongside the US and the European Union, Moscow would compromise a key economic outlet at a time when it most needs one, especially if hostilities were to proceed.
Markets have seemingly judged that this makes de-escalation likelier than before. Gold prices fell alongside the anti-risk US Dollar and Japanese Yen. Capital seems to reflexively flow to the yellow metal at times of geopolitical instability, so its retreat together with standby liquidity-haven currencies looks telling. A parallel drop in crude oil prices may portend easing supply disruption fears. Russia is a top-3 global oil producer.
CRUDE OIL TECHNICAL ANALYSIS
Crude oil prices retreated, slipping back below the inflection zone just below the $93/bbl figure and seemingly overturning last week’s upside breakout. Immediate support is at $88.41. A daily close below that may open the door for a slide to retest the downside barrier anchored at 84.65. Alternatively, a push back above the outer layer of immediate resistance at $92.72 may expose the swing top at $95.82.
Trade Example: Open Sell Position of 10,000 unit of USOILpro with Take Profit of 88.41 would result in up to $13,900 of Profit once Take Profit is Reached.
IF Oil Price Fails to hold $88.40, then further targets of $ 84.65 is possible with Sell position of 10,000 units would result in up to $52,500 profit once take profit is reached.
