What to Watch on Monday

There are a number of things to watch for on Monday.

Oil. After the Baker Hughes Friday numbers come out, investors will again become cautious and will wait to see what OPEC+ members do. If the number of rigs that increased by 6-8 last week is confirmed, oil will be under tremendous pressure, at least until the EIA releases data on oil inventories on Wednesday and until preliminary API data are released. The push for Brent crude to cross the $45/barrel mark will give oil a small safety margin. Local support is at $45, $44.75, and $44.50 on Monday. The corresponding resistance is at $46, $46.25 and $46.50.

Trading in the Asia-Pacific region. Trading in a number of regions will be closed on Monday for national holidays. Key indexes, including Japan’s Nikkei 225, South Korea’s Kospi, Hong Kong’s Hang Seng, and China’s Shanghai, will probably start trading slightly down on pressure from the commodities sector and on a decline in the stocks of corresponding companies in those indexes. The USD/JPY pair most likely will continue its decline according to intra-day indicators. Over the week, the pair pushed hard toward the 111.15 mark with a target at 111.

European trading will largely depend on several key numbers from Eurozone members and on UK data. At 8:00 am GMT, it will be worth taking a look at data from indexes on German business expectations and business climate which, according to the current consensus forecast, are still expected to be negative. If the forecast is confirmed, the EUR/USD might fall locally. If it falls, the target will be 1.1141; if it rises, the resistance will be at the 1.12 mark.
We advise paying attention to news on the number of new mortgage loans in the UK at 8:30 am GMT: the number has been dropping for the last 3 months, which is a factor in the decline of the British pound. After Friday’s rise, the GBP/USD pair may adjust to the 1.267 mark.

US trading will start with data on basic durable goods orders at 12:30 pm GMT. If the consensus forecast is positive, the data might even beat expectations, which could strengthen the US dollar relative to a shopping cart of core currencies and push US indexes higher. One should, however, consider that industry indicators will also play a major role, and the fact that the WTI is nearing the $41.50-42.00/barrel mark will be a strong impetus for a decline.

Yuri Prokudin, Olymp Trade analyst

Olymp Trade Review