Crude oil improves as nervous market tackles US unemployment claims

0
11


Talking points on crude oil and gold:

  • Crude oil markets like everyone else obsessed with the number of jobless claims in the United States
  • Millions of applicants increasing now widely feared
  • Gold prices fell, investors once again preferring cash

Crude oil prices were back near their starting point in Thursday’s Asia-Pacific session as it started to drop. Early gains were limited in the afternoon jobs as investors nervously awaited key data from the US labor market.

Markets in the United States will learn how many Americans first took out unemployment benefits this week until March 21, with millions of new applicants should now be added to the list thanks to the economic ravages of the coronavirus.

The prospect hovered over the passage of a $ 2 trillion stimulus and assistance bill by the United States Senate, propelling it to a vote in the House or representatives on Friday. Participants in the energy note will be particularly aware that such government action, however huge, can only help once the recovery has started. This in itself cannot lead to a critical drop in infection rates.

Oil – American crude
BEARISH
Data provided by



of customers are long net.



of customers are net short.

Switch

Long

Shorts

OI

Daily 16% -4% 12%
Weekly 24% 12% 22%

The price war between the major exporters of Saudi Arabia and Russia threatens the crude oil markets with a massive supply glut at a time when demand is collapsing. Indeed, US crude stocks rose 1.6 million barrels last week, the ninth consecutive week of gains.

Gold
BULLISH
Data provided by



of customers are long net.



of customers are net short.

Switch

Long

Shorts

OI

Daily seven% 9% 8%
Weekly -9% 13% -4%

Gold prices fell, apparently as investors rushed in cash again to cover losses elsewhere. This trend has been well observed in the precious metals market this year, prices falling despite the clear economic uncertainty against which gold and silver would supposedly hedge.

This market can still expect significant support if these figures for the US labor market are as low as investors fear.

Technical analysis of crude oil

Crude oil prices, daily chart

This price shock may be one of the fundamental reasons why crude oil prices in the United States have risen so little even as the hope or reality of various large-scale stimulus packages around the world has raised expectations. ‘other markets. For the moment, prices remain very close to the lows of seventeen years recorded earlier this month, the bulls cannot be girded for a serious attempt at resistance, even in the short term, in the area of ​​27, $ 22 / barrel.

Increases of several million claimants in labor data in the United States may well make it impossible to test these lows again. A dying job market will clearly destroy demand for energy in the short term as supply grows.

Technical analysis of gold

Gold price, daily chart

Gold prices also fell before the key resistance, in this case the psychological level of $ 1,650. Another upward test is likely to take place soon, but for the time being, the decline is concentrated in a large band of support between the lows of early March and those of February.

In today’s environment, pullbacks to this level may well represent little more than a better opportunity to go long, but those who do so should be aware that this market will remain vulnerable to slippage whenever investors need liquidity. to cover losses elsewhere.

Merchandise trade resources

– Written by David Cottle, DailyFX Research

FFollow David on Twitter@DavidCottleFX or use the Comments section below to contact us!



LEAVE A REPLY

Please enter your comment!
Please enter your name here