Oil has updated lows since June

Financial and commodity markets analytics

Market Watch review. 30.10.2020

In today's release, we’ll cover the following topics:

  • France has tightened quarantine measures. 
  • US stock market sell-offs. 
  • WTI crude oil updated lows since June this year. 
  • Trade deal analysis. 

From the very beginning of this week, the key news is the second wave of coronavirus spread in Europe, which continues to put significant pressure on risky assets. The concerns of traders and investors increased after the French President announced additional restrictions on the movement of citizens, as well as the closure of a number of institutions and retail outlets. The new rules have already come into force and, as a result, have put significant pressure on the EUR.

The EUR/USD currency pair has already collapsed under the technical support level of 1.1700, indicating that sellers are ready to continue the decline to the next target at 1.1615. Let me remind you that the weakening of this currency pair is also reinforced by the general strengthening of the USD. Therefore, the bearish scenario remains a priority.

Shifting to the US trading session, I will note a fairly high saturation of the news background, so there is no need to count on a decrease in trading volatility. Moreover, as we approach the date of the US presidential election, market tensions increase, which also contributes to the growth of trading activity in the US dollar.

The rapid increase in the number of confirmed cases of coronavirus around the world and the tightening of quarantine restrictions in several European countries are putting pressure on risky assets. As a result, we are witnessing a fairly strong decline in US stock indices throughout the week, which in turn contributes to the strengthening of the USD. Considering all this, there is a risk of further growth of the American currency.
The energy sector should also be taken into account. The price of the American WTI oil has reached the lowest level in the last five months. At the same time, even slight toughening of quarantine measures in the USA may considerably intensify the activity of sellers, having collapsed oil quotations to $32 per barrel. But before the presidential elections in the USA, scheduled for November 3, this scenario remains unlikely.

I will conclude today's review with an analysis of the deal for the sale of American WTI crude, which is traded under USOIL ticker in MT4 terminal. The deal for sale was opened with the volume of 1 lot at $38.4 and Take Profit order was placed at the next strong technical support level of $36.0. It should be noted that oil quotes collapsed much deeper, allowing to earn much more. But in this case the deal has brought $2400 profit.

Closely monitor the news background and be prepared for all the surprises of the market.