Oil Gap Monday:
Another Monday morning and another big gap down in Oil:
On the blog we’ve been following the longer term OIL chart for weeks (click make it live) and trying to warn about the dangers of picking bottoms in such a strong bearish trend. Every single time that the bulls get some legs and try to test resistance, headlines about oil’s recovery flood the wires. But not a single technical case has been mounted to even dip your toes into oil longs!
With international sanctions lifted on Iran, the country is set to add to global oil supply by boosting oil production and exports. With the Saudi Arabian economy already struggling, by adding to the global supply of oil, Tehran knows it can further heap pain on its regional rival and make a profitable return to the world market in the process.
According to deputy oil minister for commerce and international affairs Amir Hossein Zamaninia, Iran is targeting an immediate increase 500,000 barrels a day to be shipped. Speaking in Tehran on the weekend, Zamaninia added that the plan was to double this output within months.
With Oil trading deeper into the $20 handle, now at $28.50, the uncertainty around this supply increase is what will have the biggest effect heading forward. DO NOT read headlines. DO NOT catch knives with zero technical confirmation.
Chart of the Day:
Another look at the GBP/USD chart we’ve been following for a few weeks now. Last chance saloon for the buyers in this support zone?
The weekly support zone is on its last legs. Price hasn’t even looked like bouncing all of last week and we’re now at the very bottom of the zone. This is a prime example of why you need to understand where price sits on the weekly.
A 300 pip zone on the weekly is nothing big and by identifying the level, you can save yourself getting chopped out of trades while you try to catch a falling knife too early.
On the Calendar Monday:
USD Bank Holiday
CNY GDP q/y
CNY Industrial Production y/y
“US banks will be closed in observance of Martin Luther King Day. King was the chief spokesman for non-violent activism in the Civil Rights Movement, which successfully protested racial discrimination in federal and state law.”
Dane Williams – @VantageFX
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