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WTI crude breaks above $50

WTI Crude Oil – Weekly Candlesticks
Source: GKFX / MT4 (January 5, 2021)

WTISPOT has crossed over $50 per barrel but faces significant resistance from former support formed in June-September 2019 as well as the 61.8% Fibonacci retracement of the drop from September 2018. 
 

TAKEAWAYS


•    Oil prices surges 5%, WTI crude rises over $50 per barrel
•    USD/JPY drops below 103
•    Bitcoin back over $34k after JP Morgan forecasts a rise to $146K
•    Asian stocks gain while China telecoms jump as NYSE relists
•    Voting takes places in Georgia runoff elections
•    DAY AHEAD: Services PMIs, BOE Bailey speech, ADP, FOMC Minutes
 

GURU WISDOM


“The purpose of life is a life with a purpose. So I’d rather die for a cause, than live a life that is worthless.” – Immortal Technique
 

MARKETS


*Daily closing price
↗ EUR/USD    1.2295        (+0.38%)
↗ GBP/USD    1.3623        (+0.40%)
↘ USD/JPY    102.75        (-0.33%)
↗ S&P 500    3726.86    (+0.71%)
↗ Hang Seng    27,649.86    (+0.64%)
↗ Gold        1950.07    (+0.40%)
↗ Oil (Brent)    53.54        (+4.80%)
↗ Bitcoin    34,173        (+6.72%)
 

NEWS

 

Oil price


The price of oil climbed after a surprise output cut from Saudi Arabia of 1 million barrels per day. Most OPEC+ cartel members kept output steady while Russia and Kazakhstan will add a combined 75,000 barrels per day. The lower supply from OPEC will offset the reduction in demand brought about by new lockdowns in the UK and Europe.
 

USD/JPY


The slow burn decline in the US dollar we discussed in this week’s webinar took the yen higher and USD/JPY below 103. That’s the lowest since the crash in March and may garner the attention of the Bank of Japan who will be keen to try to keep the exchange rate above 100. The level of dovishness of Fed minutes today could determine whether the near term weakness continues.
 

Bitcoin


A call from investment bank JP Morgan for Bitcoin to rise over $146,000 helped spur a rebound in the cryptocurrency back towards record highs. The bank say BTC is now competing for flows with gold but needs lower volatility to reach its price potential.
 

China telecoms


The New York Stock Exchange has inexplicably U-turned on its decision to de-list 3 China telecom companies. The news propelled the three respective stocks higher and added to broadly positive sentiment in Asian markets.
 

DAY AHEAD 


TIME (GMT)        EVENT                    CONSENSUS    PREVIOUS
01:45        CNY    Caixin Services PMI(Dec)         51        57.5
08:55        EUR    Germany Markit PMI Composite(Dec)     52.5        52.5
13:00        EUR    Germany CPI (YoY)(Dec) PREL          -0.6 %        -0.7 %
13:15        USD    ADP Employment Change(Dec)         88 K        307 K
14:00        GBP    BoE's Governor Bailey speech         
14:45        USD    Markit Services PMI(Dec)         55.3        55.3
19:00        USD    FOMC Minutes