The Brent rise, waiting for the OPEC deal

With Brent that trades around $49,43bbl, Oil has recovered 50% of the disadvantage accumulated during the first days of November, and it seems that the commodity wants to go back to the October highs, driven by expectations of an OPEC deal.

The price has been fueled by a renewed push of the members of the Organization of the Petroleum Exporting Countries which have expressed a willingness to work together to reach a common agreement on the output level during the crucial meeting next week.

The positive momentum is fueled also by the Russian president Putin, who recently said that an agreement could be done during late November.

The continuous news coming from OPEC will for sure favor certain movements of the Oil price during today’s session, while later today the API report on the Oil inventory will lead the investors view.

brent_22_nov

Looking at the chart from a technical point of view, a beak of the significant resistance @ $49,85 (61,8% Fibo level) would expose the Brent price to a rise to $50bbl. On the opposite side, in case the price would break the support @ $49,00 i expect a drop until the $47,77 level (100-DMA).

 

 

USD: what if Hilary wins…

In the US someone said that a possible win of Hilary Clinton at the elections, obtained without a democratic majority, could bring to very little movements of the major G10 currencies.

More specifically, now, with decreasing political uncertainties, we may see a US rates recovery accompanied by an equity bullish movement.
In terms of currencies, however, interesting is the relationship with the Japanese Yen, which would function as a hedging tool against Trump risk, and this may lead to an increased vulnerability of the US dollar against the JPY.
Opposite situation with regard to low-yield currencies such as EUR and CHF, which could underperform against the Greenback in relation to the safe haven status that distinguishes them.

Placing a focus on the EUR/USD, it is easy to note that the 1.1200 area continues to be a strong resistance to occasional spikes the drops.

eurusd-04nov

The yesterday’s rally met an initial resistance at 1.1123 (August-September Low) and then descend and climb again with a swinging motion. At the time of writing the cross is trading at 1.1097 slightly down compared to yesterday’s close (-0.07%), while the markets remain calm looking forward to the release of today’s data on Unemployment and Non-Farm Payrolls.

At about 13:30 (Italian time) we expect a gradual increase in volatility, as often happens during events of this importance, so we could see also quite relevant spike and drop.