Technical Analyst, Saxo Bank
Summary: Brent and WTI Crude oil have taken out key supports confirming downtrend both short- and medium-term. there could be 10-15% further downside for oil
Brent Crude oil has resumed downtrend by taking out minor support at around 75.60 and the December lows at around 75.11. RSI back below 40 is confirming new downtrend.
A downtrend that could take Brent to strong support level at 65 close to the 0.618 retracement of the entire uptrend since Q2 2020. Minor support at around 69.24 close to the 1.382 projection of the Triangle like pattern Brent formed December-March.
For Brent to reverse the bearish trend a close above 86.75 is needed.
WTI Crude oil. After being range bound for several weeks WTI took out minor support at 72.45 and key support at 70.00 resuming downtrend. WTI has reached 0.382 retracement of the entire uptrend since Q2 2020 where it went to minus 40.32. But further downside should be expected.
Daily and weekly RSI is back below 40 threshold confirming the bearish picture that is likely to take WTI down to support at around 61.80 possibly dipping down to support at around 57.25.
To reverse this bearish trend WTI needs to close above 79.90
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.