Oil, DAX Forecast: Two Trades to Watch

Oil attempts to recover from yesterday’s brutal selloff

Oil fell over 5% on demand worries
Gasoline inventories posted the largest build in almost two years
Oil found support at 83.50

Oil prices are attempting a rebound after falling over 5% in the previous session, wiping out all of September's gains.

Concerns over the macroeconomic outlook and, therefore the demand outlook, as well as a stronger U.S. dollar and the largest builds in gasoline inventories in almost two years, sent oil prices tumbling lower towards $84 a barrel.

The oil market brushed off the OPEC+ meeting's more upbeat outlook towards demand and the prospect of tight supply as the group made no changes to the oil output policy, and Saudi Arabia confirmed it would continue its voluntary cut of 1,000,000 barrels per day until the end of 2023.

The recent rally across the summer in crude oil prices has been on the narrative of tighter supply and the resilient global economy. However, recent U.S. data has shown some signs of the economy cooling which is unnerving the oil market.

Oil forecast – technical analysis

Oil has fallen sharply across the week, down 7%. The price broke below the 20 sma, the multi-month rising trendline, and the 50 sma before finding support at 83.50, the April high.

Sellers will need to break below 83.50 in order to extend losses towards 82.00, the early April and mid-August high.

Any recovery must rise above the 50 sma at 84.85, which is also the August high. Above here, the rising trendline resistance comes into play at 85.50.

Dax rises as the market mood improves

Wall Street closed higher after bond yields eased
German exports fell by more than expected
DAX tests resistance at 15000

The DAX and its European peers are set to open slightly higher on Thursday, helped by an upbeat finish on Wall Street the day before as the recent surge in the bond yields eased.

A cooler-than-expected US private payroll report on Wednesday saw investors rein in expectations of another rate hike by the Fed this year.

Here in Europe, the German trade balance showed that exports and imports fell by more than expected. German exports dropped -1.2% MoM in August, worse than the 0.4% forecast. The data suggests that trade is no longer a strong growth driver for the German economy. Imports fell 0.4%, defying expectations of a 0.5% rise.

The data comes after mixed data from the eurozone in the previous session, where retail sales fell by 1.2% MoM in August, more than expected, pointing to weak consumer demand as inflation remains high. Meanwhile, the composite PMI, also released on Wednesday, pointed to the eurozone economy most likely contracting in the third quarter putting a recession in the second half of the year as very likely.

Looking ahead, ECB speakers will be in focus and could influence sentiment with any comments regarding the outlook for the economy inflation and the future path of interest rates.

In the US session, jobless claims will be under the spotlight and are expected to rise to 210K, up from 205K. The data comes ahead of tomorrow's key non-farm payroll data.

DAX forecast – technical analysis

The DAX has been trending lower, dropping from a peak of 16500 at the end of July to a low of 14945 yesterday.

The price has picked up from the 14945 level. However, the 20 sma crossing over the 200 sma and the RSI below 50 support further downside. Sellers will need to break below 14945 to extend the selloff towards 14775 the March 24 low.

Buyers could be encouraged bny the long lower wick on yesterday’s candle suggesting there was little appetite from sellers at the lower levels. Buyers are testing resistance at 15000 the psychological level, with a rise above here bringing 15465 the August low into focus.

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.