Traders Take Profits after the Week’s Oil Rally

On Wednesday, markets in the Asia-Pacific region successfully took back Tuesday’s losses as the dollar strengthened vis-a-vis commodities and reserve currencies. The USD/JPY pair rose to the 113.67 mark, although it was unable to hold on to it. It appears that the Japanese yen is aiming at 114, which will not be hard to breach if the dollar is supported by good news from the United States.
Japan’s Nikkei 225 gained 0.25%, Hong Kong’s Hang Seng 0.52%, South Korea’s Kospi 0.33%, and China’s Shanghai Composite 0.76%. Asian investors welcomed the initiative of the RF and China to possibly limit North Korea’s missile tests through an embargo or some similar initiative.

European trading was up moderately, despite the EUR/USD’s descending trend, which helped Eurozone indexes climb; the fall in the price of oil is again giving investors pause and making them act with extreme caution. The spotlight is on US unemployment data on Friday, so stock trading activity might be somewhat slow.
Overall, only the Euro Stoxx 50 closed down, losing about 0.1%; the majority of indexes edged up 0.08-0.16, including Britain’s FTSE 100. The EUR/USD continues to correct toward the 1.1325, which it was testing during European trading. It appears that the drive to return to 1.13 will prompt investors to keep selling the euro on Thursday.

Brent crude fell to $48/barrel and continues to trade down. Despite the decrease in the number of drilling rigs, the oil glut in the United States continues. The number of drilling rigs far exceeds the 2016 level and is taking us back to April 2015 numbers. Traders, who decided to take their profits after the week’s oil rally, helped oil drop.
It appears that investors will be on the lookout for preliminary data from the American Petroleum Institute that come out Wednesday at 8:55 pm GMT and for today’s oil inventories numbers. If inventories rise, the target for oil is $47.50.

Yuri Prokudin, Olymp Trade analyst

Olymp Trade Review