Market News

Global Economic Factors: Crude Oil, China!

Key Points Regarding Crude Oil, China, and Global Economic Factors:

  • Crude oil prices experienced a decline due to renewed strength in the US Dollar.
  • The Federal Reserve’s signaling of its intentions has caused some market unease.
  • Concerns arise about the impact on WTI if China struggles to revive its economy.

Crude oil prices saw a decrease on the previous day, retreating from the recent 10-month peak reached last week.

The energy commodity seems to be influenced by a combination of factors. This includes China’s economic challenges and the potential for a prolonged hawkish stance by the Federal Reserve, which is contributing to the strength of the US Dollar.

In contrast, liquefied natural gas (LNG) prices managed to gain momentum due to the possibility of labor disputes in Australia’s significant gas fields located in the northwest.

Despite the marginal softening of China’s new home prices in July, concerns grow over the potential for financial contagion stemming from property developers’ missed debt payments to impact other sectors.

Crude Oil, China, and Global Economic Factors

Global Economic Factors: Zhongrong International Trust Co., a significant player in China’s trust sector, has failed to meet obligations to its clients in recent weeks.

The People’s Bank of China set the Yuan’s reference rate at 7.1986, surprising the market with a notably stronger valuation. Reports indicate that State Banks have been instructed to purchase the Yuan.

Australian mining stocks face downward pressure due to fears that the ongoing economic slowdown in their primary customer, China, could negatively affect their exports.

The APAC trading session’s risk sentiment and outlook for growth-oriented assets were already dampened. It is following a decline in major indices during the previous North American session. Wall Street experienced a drop of over 1% across its key benchmarks.

This negative sentiment was fueled by robust US retail sales figures, which raised concerns about a more hawkish Federal Reserve stance compared to previous expectations.

Minneapolis Federal Reserve President Neel Kashkari’s remarks further reinforced these concerns. He questioned whether the Fed had taken sufficient measures to bring inflation down to the targeted 2% level.

Treasury yields are slightly lower as Wednesday’s trading begins, following a modest increase in basis points across the yield curve on the previous day. Spot gold’s value remains steady above the $1,900 mark.

The Reserve Bank of New Zealand

The Reserve Bank of New Zealand (RBNZ) has decided to keep its cash rate unchanged at 5.50%. However, the market interpreted the accompanying statement as having a hawkish tone, leading to a rally in the New Zealand Dollar (Kiwi).

GBP/USD remains stable near 1.2700 in anticipation of inflation data, while EUR/USD traders are monitoring Eurozone-wide GDP figures.

For a comprehensive economic calendar, refer here.

Technical Analysis Snapshot for WTI Crude Oil

The WTI futures contract recently broke below the lower boundary of an ascending trend channel. To learn more about breakout trading, click on the provided banner.

The current selloff appears to have paused around the 21-day simple moving average (SMA). This could serve as a potential support level. Further support levels may be found at the 260-, 200-, 100-, and 55-day SMAs at 79.11, 76.68, 75.06, and 74.90, respectively.

Additional support could emerge near recent lows of 79.90 and 78.69. In the event of further decline, support might be found around the 77.33 breakpoint and the prior low at 73.82.

On the upside, resistance levels could materialize around the 83.40 breakpoints, followed by the recent peak at 84.89.

Lastly, don’t forget to see the Market News

Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Our Newsletter

Subscribe to ForexPropNews Trading Newsletters

Receive the best-curated content by our editors for the week ahead.

Mini Charts

Related Articles

Profit-Taking and Tech Sector Weakness Drive Down Asia-Pacific Markets

Asia-Pacific markets declined on Friday, reflecting Wall Street’s tech stock sell-off. Japan’s...

Asia-Pacific Markets Plunge on Chip Stock Declines: Market Watch

Asia-Pacific markets plummeted on chip stock declines, reflecting global economic uncertainties and...

Forex Focus: Dollar Strength and Market Movements in Asia

U.S. retail sales in June held steady at $704.3B, buoyed by non-store...

Asian Markets React to Powell’s Dovish Remarks with Mixed Results

Asian markets reacted mixed after Powell's dovish comments, with Hong Kong's Hang...

Featured educational content

EXPLORE MORE

Featured educational content

New to Forex? Learn to Read Charts Like a Pro

Dive into forex trading basics: chart reading, candlesticks, technical indicators, timeframes, currency pairs. Start your journey to trading success today!

Video: How I Re-Programmed My Mind to be a Consistent Trader (Thanks to The Wolf of Wall Street)

How I Re-Programmed My Mind to be a Killer Trader (Thanks to The Wolf of Wall Street)

Video: This Invisible Trading Indicator Tells you What Day Trade (Not Just Price)

This Invisible Trading Indicator Tells you WHEN to Trade (Not Just Where)

Technical Analysis: Chart Patterns and Indicators for Profitable Investments

Navigate stocks with confidence using chart patterns like Head and Shoulders, indicators such as MACD, and tools like trendlines. Master technical analysis for...

Latest News

Profit-Taking and Tech Sector Weakness Drive Down Asia-Pacific Markets
Market News

Profit-Taking and Tech Sector Weakness Drive Down Asia-Pacific Markets

Asia-Pacific markets declined on Friday, reflecting Wall Street’s tech stock sell-off. Japan’s inflation remained steady, and chip stocks showed resilience.

Asia-Pacific Markets Plunge on Chip Stock Declines: Market Watch
Market News

Asia-Pacific Markets Plunge on Chip Stock Declines: Market Watch

Asia-Pacific markets plummeted on chip stock declines, reflecting global economic uncertainties and geopolitical tensions, impacting regional indices sharply.

Copyright © 2023 Forex Prop News. All Rights Reserved.