USOil Slides Despite Upbeat Chinese Data & Improved IMF Outlook

  • USOil
    (${instrument.percentChange}%)

USOil Analysis

The commodity runs its second negative week and will have a hard time avoiding a losing month, as investors brace for the central bank bonanza and other events. Monetary policy decisions by the European Central Bank and the Bank of England are expected on Thursday, with US Fed kicking things of tomorrow.

Markets price-in another downshift in the pace of tightening by the Fed, with a smaller 25 basis points rate increase, but seem to grow weary of any hawkish signals. Policy makers have not pushed back against that projection, but have maintained a clearly hawkish stance and the last dot-plot suggests a higher terminal rate (median of 5.1%) than the one markets anticipate. [1]

USOil extends its losses today as the European session gets underway and this keeps it exposed to the broader 72.43-70.06 region. However, a strong catalyst would be needed for a test and sustained weakness below this area continues to look difficult.

On the other hand, China's reopening is supportive and todays data showed that the manufacturing sector expanded for the first time since September, with a PMI print of 50.1 for December. Furthermore, the International Monetary Fund raised its 2023 global GDP forecast to 2.9%, from 2.7% previously, although this is still lower than the 3.4% estimated growth of the previous year. [2]

More to it, the Relative Strength Index (RSI) points to oversold levels, which along with the daily Ichimoku Cloud can contain the drop. As such, we can see another push towards 84.70, but we are still cautious for further advance towards and beyond 90.36.

Trade the News: View our Economic Calendar

Nikos Tzabouras

Senior Financial Editorial Writer

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 31 Jan 2023 https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20221214.pdf

2

Retrieved 20 Jun 2024 https://www.imf.org/en/Blogs/Articles/2023/01/30/global-economy-to-slow-further-amid-signs-of-resilience-and-china-re-opening

${getInstrumentData.name} / ${getInstrumentData.ticker} /

Exchange: ${getInstrumentData.exchange}

${getInstrumentData.bid} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)

${getInstrumentData.oneYearLow} 52/wk Range ${getInstrumentData.oneYearHigh}
Disclosure

Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.

Past Performance: Past Performance is not an indicator of future results.

Spreads Widget: When static spreads are displayed, the figures reflect a time-stamped snapshot as of when the market closes. Spreads are variable and are subject to delay. Single Share prices are subject to a 15 minute delay. The spread figures are for informational purposes only. FXCM is not liable for errors, omissions or delays, or for actions relying on this information.