CAD Weakens;
On Monday, the Canadian dollar weakened against its major counterparts due to falling oil prices. The Opec meeting is scheduled to discuss current pricing policies for petroleum products. Crude oil prices fell $0.82 per barrel to 78.87 on March 1st due to concerns over supply and global economic uncertainty. Investors are eagerly awaiting the OPEC meeting scheduled for February 1. The organization is expected to maintain its production levels despite recent improvements in oil prices.
The Federal Reserve is scheduled to hold a policy meeting on January 31-February 1. It is expected that the Fed will lower its interest rates by 0.25%. All eyes are on the accompanying statement for clues about the outlook for further rate hikes.
EUR/USD Short Term Outlook:
According to recent market analysis, the euro/USD has breached resistance on the 200-day moving average, indicative of an upward trend. The steeper slope of this rising channel suggests that momentum is stronger than previously thought.
The sentiment of investors in the EUR currency is positive overall, with a majority of traders (41%) positions being long and fewer traders (14% vs. 23%) positions being short. The number of net-long participants is 14% higher than last week while the number of net-short participants has decreased by 7%.
The European Central Bank (ECB) could be increasing rates more aggressively than previously thought, as it continues to battle against inflation. Meanwhile, the US Federal Reserve is expected to slow the pace of its rate increases. As a result, speculative long positions in the EUR have jumped. Euro markets have so far shrugged off news of an enormous bond supply coming in 2020-2023 – i.e., evidence that sovereign stress may occur
Nat Gas: worst 2-Month drop in over 15 Years
Gas prices continued to drop this past week, marking the sixth consecutive decline and their worst performance in over a year. January’s declines were even more severe- down about 36% overall. And if you look at a shorter timeframe (2 months), this is the worst 2-month run since 2008! Accumulated weather conditions in the US for February are playing an important role, as well as rising inventory levels.
The commodity market continues to decline after breaking below the December 2021 low of 3.536 USD. This has exposed the 2020 bottom range between 1.44 and 1.61 USD, which was first identified back in late December 2018 when natural gas began heading towards a bearish Head and Shoulders chart pattern.