Forex Investment and Currency Trading

Brent crude prices are moving higher with the recent activity showing accelerated gains. The May contract is finally showing a turn higher in the moving averages, as the 20-day moving average is rising at USD 46.26/bbl, while the 60-day moving average is now at USD 45.18/bbl. From a charting perspective, the move above the USD 52.20/bbl resistance area (USD 52.21/bbl was the Jan. 06 high on the continuation chart) helps to confirm the breakout higher, with the USD 56/bbl level kept as the near term target. Some support is layered from USD 52.20/bbl to USD 50/bbl, but more significant chart [...]

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There had been a correlation between movements in EUR/USD and the price of crude oil, although the dynamics driving that relationship appear to have shifted. Over the last 6-12 months it appears an asymmetric response function among major central banks to movements in oil prices that may have contributed to the correlation between EUR/USD and the oil price. Given rising headline inflation in the Euro zone and the ECB’s sole mandate of inflation control, rising oil prices were viewed as an upside risk to inflation. For the Fed and its dual mandate, however, rising oil prices marked an upside inflation [...]

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The oil market is trading like it is out of gas and we are bouncing right upon the 40-day moving average, a line which has defined the up trend since early February. As you can see from the chart below, a daily close below the 40-day would be very significant technically and should open up a quick move to 122.00 and a reassessment of the debate between “speculative momentum-driven bubble” vs. “legitimate structural rally”. The likely idea that momentum and index investors are responsible for the most recent price increases on the simple argument that the combination of increasing supply [...]

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The move below the $135.14 area opens up the possibility of a double top forming that could give a much deeper correction with a target of the mid $120’s BUT
The day is young and we may not sustain the break at the close and there is very good support in the $130.80 to $131.50 range (trend lines and 55 day moving average)
The present correction so far has been 10.4% high to low compared to a similarly aggressive correction in March of 11.4%, which became a platform for a renewed surge when the 55-day moving average did not give way.
So the [...]

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