OIL is trading a bit higher, as the US retail sales data which was released yesterday came as a disappointment. However, the upside is limited, in my opinion. There is a monster bearish divergence forming on the 4 hour chart, which means OIL can move lower at any point of time. So, selling seems to be a good option in the short term.
Looking at the 4 hour chart of OIL, there is a bearish trend line, which has held the upside many a times. OIL is trading around the same trend line as of writing. I think selling around the trend line is a good option. So, if the price is just below or around the trend line, then you can enter into a sell trade. Remember, OIL should respect the trend line for this sell trade to be valid.
Initial target should be around the 100.80 level, and final target could be around the 100.00 level. Stop should be placed above the 102.80 level.
Reviewing yesterday’s events and trades
Yesterday during the European session, the German and Euro zone ZEW economic sentiment data were published. The outcome was very disappointing, as the German ZEW economic sentiment fell by more than 10 points. This resulted in a down-move in the EURUSD pair. Later, the US retail sales data was released, which also missed the expectations, but the data failed to ignite a relief rally for the EURUSD pair. The EURUSD pair traded as low as 1.3690 yesterday. The GBPUSD pair was also seen trading lower during the NY session yesterday.
Fundamental Outlook for the day
Today, the US Producer Price Index (PPI) and core PPI data will be released during the NY session. The market is not expecting a heavy gain in the Producer Price Index. So, if the data comes out well, then the US dollar can gain more ground later today. On the other hand, if the data comes misses the expectation, then the US dollar can lose some of the recent gains, especially against the Euro. Later during the next Asian session, Japan’s GDP data will be published, which can act as a catalyst for the Japanese yen in the short term. So, keep an eye on these events and trade accordingly.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURUSD, GBPUSD, EURGBP, USDJPY, USDCAD, NZDUSD, AUDUSD, EURCAD and EURAUD.
Get it HERE: Vladimir’s Markets Forecast
Trade carefully friends. Happy trading!
