Aayush Jindal
Key Highlights
- Crude oil price formed a strong support above$51.00 against the US dollar.
- There was a break above a major bearish trendline at $52.20 on the 4-hours chart of XTI/USD.
- The US Housing Starts declined 0.9% in May 2019,more than the market expectation (-0.4%).
- The Fed interest rate decision is scheduledtoday and the central bank is likely to make no changes in rates.
Crude Oil Price Technical Analysis
After a significant decline, crude oil price found strong supports near $50.75 and $51.00 against the US Dollar. A base was formed near $51.00 and recently the price started a short term recovery above $52.00.
Looking at the 4-hours chart of XTI/USD, the price started a steady rise from the $51.48 swing low. It traded above the $52.00 and $52.50 resistance levels, but remained well below the 100 (red) simple moving average (4-hours), and the 200 (green) simple moving average (4-hours).
During the recent rise, there was a break above a majorbearish trend line with resistance at $52.20. Moreover, the price surpassed the76.4% Fib retracement level of the decline from the $53.40 high to $51.48 low.
It opened the doors for more gains above the $53.40 level. Thebulls successfully cleared the $53.80 resistance level and the 1.236 Fibextension level of the decline from the $53.40 high to $51.48 low.
However, the main resistance is near the $54.20 level plus the100 (red) simple moving average (4-hours), above which the price is likely tomove into a bullish zone.
On the downside, an initial support is near the $53.20level. If there is a downside extension, the price could retest the $52.50support. The main support is near $51.00, below which there could be heavylosses.
Fundamentally, the US Housing Starts report for May 2019 wasreleased by the US Census Bureau, at the Department of Commerce. The market waslooking for a 0.4% decline in the Housing Starts, compared with the last 5.7%increase.
The actual result was lower than the forecast, as the USHousing Starts declined 0.9% in May 2019. On the other hand, the last readingwas revised up from 5.7% to 6.8%. .
The report added:
Privately‐owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 1,294,000. This is 0.3 percent (±1.3 percent)* above the revised April rate of 1,290,000, but is 0.5 percent (±1.4 percent)* below the May 2018 rate of 1,301,000.
Looking at major pairs, EUR/USD and GBP/USD struggled to climb higher, whereas gold price settled above the $1,325 support level.
Economic Releases to Watch Today
- UK Consumer Price Index May 2019 (YoY) –Forecast +2.0%, versus +2.1% previous.
- UK Core Consumer Price Index May 2019 (YoY) –Forecast +1.7%, versus +1.8% previous.
- Canadian Consumer Price Index May 2019 (MoM) –Forecast +0.2%, versus +0.4% previous.
- Canadian Consumer Price Index May 2019 (YoY) –Forecast +2.2%, versus +2.0% previous.
- Fed Interest Rate Decision – Forecast 2.50%,versus 2.50% previous.
