"Hold your Oil Shorts" Calls from the Floor

Ladies & Gentlemen 

As our eyes turn to the weekend - the volatile weekly Oil market draws to a close after a neat 10% slide on the back of further global supply gluts. 

From my post labelled "Crude Oil - A Bargain Hunt" the larger oil producing nations are looking at the $50 mark as the benchmark heading into 2016. However, the institutions & techies are looking at $50 as a perfect opportunity to remain short. 

So how are the Traders actually clicking? Well.. the more short-term clickers are looking at more downside targets, however some trading puritans would argue about the risk:retun. Although, as i Look at the chart & price action this morning, you can see that the market is heavily gripped by short covers. 

 Hence the phrase "if I can scoop a small profit I will take my money and run" in my original post. 

Looking at a first target of $46.90 and would target ever 5 cent fall beneath this level.  Tempted to leave this short open for the rest of the day heading into early next week - especially after 4 days of straight decline. WTI is set to make its steepest weekly loss in 10 weeks and Brent in 8 weeks. The Market is expected to remain heavily over-supplied heading into 2016 & sadly for the Oil companies - The Facts do not lie! 

Some Oil optimists are hoping that Shale production forecasts are on the decline, as output is geared towards a fall in November and also data from the EIA showed gasoline stocks falling by 2.6 mio barrels per week. 

Best of luck with your positions 

AnishFX @ Atom8.com 

Will the USA run out of cash by November?

Good Morning,

The overnight news was New Zealand’s inflation surprised marginally to the upside and US Treasury secretary Jacob Lew suggests  the US government will exhaust its emergency cash-management measures by November 3 and risks running out of cash if Congress doesn't raise the federal borrowing limit. Today’s data is 

10:00     Eurozone Trade Balance

                Eurozone CPI

13:30     Canadian Manufacturing Sales for August

14:15     Industrial Production for September

Capacity Utilization for September

15:00     University of Michigan Sentiment, Current Conditions and Expectations

On the speaking front we have we have BoJ’s Kuroda speaking at national Credit Union Association in Japan. BoE’s Forbes speaks at the `Brighton Chamber of Commerce on ’Growing your business in a Global Economy’ and ECB’s Coeure speaks in Berlin titled “Towards a Progressive Europe”

There are large 1.15 Eur/$ expiries and 120s in $/Jpy

Have a great week end

Gold : A Mastermind of the "Break-Out" - $1300 by 2016?

Ladies and Gentlemen

The precious yellow metal is back in the spot light after forming a pretty dull range so far this year between $1200.00 / $1100.00 and the outlook has remained bearish. However, this has all changed in the past few days as the October Bull awakens to the more uncertain Economic landscape, especially breathing from the US & from increased Geo-political action (The Ruski's in particular)!

Gold (XAUUSD.v) is showing strength above 1170 (formed yesterday) and all my indicators are pointing towards a further bull offensive. The commodity must continue to trade & hold above it's broker resistance (turned support) at 1170 to really create more scope for strength heading into the final months of 2016.  On the other click, if you remain a bear in this market - support comes in more at the 1165 level, where a break down to 1150.00 will really slam the brakes again on the metal. Me personally, I am hoping for a break of 1200 as I really do miss the days of huge Gold daily volume.

fig: Atom8 MT4 Terminal

How high could we go?  After breaking a "key resistance" level, the investor sentiment is more positive and will probably attempt to push it to a high for year-end. Gold is now trading above it's 200-day MA for the first time since May & prices could be further buoyed by (what is now expected to be) weaker US data & that the FED are now looking to raise rates next year.

A call for above 1200.00 could be realistic by December and I would not be surprised if we even saw a move to the $1,300 mark - as volume for Metals expect to be double by next year (source : mining.com).

Best of luck Traders,

Anish @ Atom8.com

Why is the SAB Miller Merger so important?

Ladies & Gentlemen 

As a "bonus" add-on to the Roller-Coaster of the FX related piece, it is also important to note what the merger means for this now Super-Mega corporate. 

Employees of SAB Miller are bracing themselves for thousands of job losses around the world post the InBev SA takeover, with a renowned reputation for cost-cutting and apart of the deal was to shrink SAB's 69,000-strong workforce. 

The deal is valued at around £70 billion making it the fourth highest-value takeover of all time. 

All aboard the GBP/USD Roller-Coaster

Ladies & Gentlemen

In the last 24 hours we have witnessed one of the most wildest days for Cable, with a near 200 pip swing - behaving more like a "spoiled kid" trading FX for the first time.  We moved to 1.5390 when the AB InBEV / SAB Miller deal (now the world's biggest brewery) was announced before a sharp move to 1.5210.

UK employment data this morning has kept calmer the beast that could form this month in Sterling as it is held below 1.53... For now at least! The UK ILO Jobless rate was posted at 5.4%, actually the lowest since mid-2008... giving a further insight into an all important component for the UK employment sector, as people get their butts into work before Christmas.

So what are the important intra-day levels to watch? Well the initial hurdle of 1.53 is clear and above that to really prove bullish power would be 1.5345, where the 200-Day SMA marks. However, a breakdown in Cable this week could fast see an exposure of 1.5107 - the low from October 1st and then a bearish eye towards the 1.50 levels once more (lows of May & also key psychological support).

What is the Future for Cable? - Again the long-term dynamics of £/$ are likely to be determined by the continued debate around rate hikes and as we all know the global economy is slowing slightly and this slow-down could backlash on the UK as well as the USA. The near-term bias could still be on the down-side.

Wishing you the best of Luck

Anish 8FX

Crude Oil - A Bargain Hunt?

Dear Traders

As we enter the final quarter in 2015, investors are watching the price of Crude Oil with an eagles eye.   Oil prices have been on a roller-coaster ride over the past few weeks, coming from 6-year lows and with talks of $30 per barrel (being the new normal) a few months ago, we have seen a remarkable comeback as the $50 mark was crossed for the first time since July.

It looks like more short-term players have seen this opportunity above $50 for greater profit-taking and more sizable positions seem to have taken the market back to $47 & if this price is not screaming for a "Pull-Back" before year-end.. I don't know what is!  However, more "conservative" fundamentalists focused on the over-supplied commodity are ignoring the price action and looking at more longer-term consolidations up to year-end & maybe till future rate-hikes - the recent drop in oil-rig counts did not help either! 

Idea

OPEC remain firm that demand should begin to increase in early 2016 and this should naturally reduce the worried over-supply figures, resulting in a more "balanced" market - which if true, should see investors price in a more bullish price action heading up to year-end.  However, warnings persist from the International Energy Agency insisting over-supply is set to stay. Although this view did not stop the Chinese "Bargain Hunters" from buying up more of the market last month.

With Russia now heavily involved in Syria and also stamping its foothold around the Middle-East's perimeter, the geo-political dynamics of the Oil Markets have a new found tension from the prospect of a potential stand-off between the US & Russia, as Russia looks at prioritizing it's hand in the Middle-Eastern Crude supply.

Recent ISIS attacks on production facilities in Norther Iraq have also added to this dynamic and of course, oil nations and businesses are keeping this in mind when attempting to analyse their quarter-end plans.

Overall, it is important to note that there is still an oversupply (surplus of around 1 million barrels per day). However, the "rebalance" force should help calm this supply over the next 12 months, where a turn upwards of $70-75 would really indicate a rebalanced market.

Trade OIL with Atom8

Atom8 are now proud to announce the launch of USOIL as a new CFD on their leading MT4 terminal. Spreads start from 1 pip and if you would like to test the core pricing, please email info@atom8.com

Best of luck with your trading

Anish 

FX & Precious Metals, Atom8 Financial Services LLP

2nd Floor, Centenary House, Palliser Road, London W14 9EQ, UK

T: +44(0)20 3405 3910 | M: +44 (0)7983701816 | anish.lal@atom8.com | www.atom8.com

Risk Warning

Trading on margin (spread betting, CFDs and FX) carries a high level of risk and may not be suitable for all investors.  The high degree of leverage can work against you as well as for you.  Before deciding to trade your live account, you should carefully consider your investment objectives, level of experience and risk appetite.  You could lose more than your initial investment and should not trade with funds you cannot afford to lose.  You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

A new month, a new quarter and the first event risk is upon us - NFP!

Ladies and Gentlemen,

A new month, a new quarter and the first event risk is upon us.

Tomorrow at 13:30 BST we get the US Non-Farm Payrolls.

At the Philip Gamble Memorial Lecture at the University of Massachusetts on 24^th September Janet Yellen said “Most of my colleagues and I anticipate that it will likely be appropriate to raise the target range for the federal funds rate sometime later this year”. There are only 2 meeting left, the next FOMC decision is 28th October and then the final meeting of year for the open markets committee takes place on 16^th December.

It is well known that the Federal Reserve do not like to surprise the market, Larry Summers former Secretary of Treasury, stated in his blog that in the last 20 years the Fed has never tightened without guiding the futures market to at least a 70 percent chance of a tightening, presently there is an 84% expectation of a December hike. Will tomorrows’ data change the market view?

Bloomberg have surveyed 93 economists and the estimates vary from a lowest approximation of 149,000 and a highest evaluation of 255,000

The average is 202,000 whilst the median is 200,000.

In August 173,000 jobs were added, down from 245,000 in July, whilst the unemployment rate fell to 5.1%

A strong number and I assume that we will see further confidence in the $ trade and whilst the commodity markets are under pressure, prefer to express this view against the commodity currencies.

Good Luck

Anish S. Lal @anish8fx

FX & Precious Metals, Atom8 Financial Services LLP

2nd Floor, Centenary House, Palliser Road, London W14 9EQ, UK

T: +44(0)20 3405 3910 | M: +44 (0)7983701816 | anish.lal@atom8.com | www.atom8.com

Risk Warning

Trading on margin (spread betting, CFDs and FX) carries a high level of risk and may not be suitable for all investors.  The high degree of leverage can work against you as well as for you.  Before deciding to trade your live account, you should carefully consider your investment objectives, level of experience and risk appetite.  You could lose more than your initial investment and should not trade with funds you cannot afford to lose.  You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.