Middle East Tensions
Crude prices have risen as tensions escalate in the Middle East. There is a fear of supply disruptions following an attack by Yemen's Houthi group against the UAE. The Houthis are aligned with Iran. whilst the UAE is a part of the Saudi Arabian-led coalition. The Houthis used missiles and drones, which exploded fuel trucks, killing three people, and started a fire near the Abu Dhabi airport. Following this attack, coalition forces responded with an airstrike that killed fourteen people in the Yemeni capital of Sanaa.
This adds a strain to a market that already has strong demand due to the cold northern hemisphere, which is affecting the prices of heating fuel. Moreover, it's compounded by the fact that some OPEC producers are struggling to meet quotas due to outages and the need for capital expenditure.
FXCM's proxy for Brent crude, UKOil, has charted a higher trough followed by a higher peak. This is the classical definition of an uptrend. Moreover, we have added a triple moving-average system to measure the strength of the trend. The quick green MA is above the intermediate orange MA, and the intermediate orange MA is above the slow red MA. Besides being a bullish formation, there is good separation between the MAs, regarded as bullish. Moreover, the orange EMA has started to turn up i.e., an angle is developing as momentum increases.
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Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.