CRUDE OIL SUPPLY AND DEMAND IMBALANCES REMAIN

Crude oil prices remained at elevated levels on Monday morning as investors reacted to the rising fears of supply and demand imbalances. Brent is trading at $107 while WTI is at $103. These prices are significantly below their highest levels this year. In a report published last week, the International Energy Agency (IEA) said that supply will drop sharply in April as oil traders swerve Russian crude to avoid sanctions. It estimates that over 3 million barrels will be cut from the market per day. The price action has been complicated by ongoing negotiations in Iran and Venezuela.

American and European futures held steady as investors bought the dips. The Dow Jones rose by over 270 points while the Nasdaq 100 rose by 280 points. Still, there are significant concerns among investors. For example, there are margin concerns considering that the price of most commodities has been in an upward trend. Also, the cost of shipping rose as companies navigate longer routes. Another concern is that the number of Covid-19 cases has reportedly been rising sharply in China. As a result, the government has announced several lockdowns affecting over 50 million people.

The economic calendar will be muted on Monday. As such, investors will continue focusing on new developments on the war in Ukraine. Russia is expected to continue bombarding cities now that its military offensive has stalled. Investors will also reflect on the interest rates decision by the Federal Reserve. The bank decided to hike interest rates on Wednesday last week. Therefore, a speech by Jerome Powell will likely have an impact on stocks and currencies.

EURJPY

The EURJPY pair has been in a strong bullish trend in the past few days as investors react to the latest decisions by the Bank of Japan and European Central Bank. The pair rose to a high of 131.60, which is significantly above this month’s low at 124.40. On the four-hour chart, the pair moved above the 25-day and 50-day moving averages. It has also risen above the 78.6% retracement level. Therefore, the pair will likely keep rising in the near term.

EURUSD

The EURUSD pair was little changed on Monday morning. It is trading at 1.1050, which was slightly lower than last week’s high of 1.1140. It is slightly above the upper side of the yellow symmetrical triangle pattern. It is slightly above the 25-day moving average and slightly below the 38.6% Fibonacci retracement level. The pair will likely keep falling as bears target the lower side of the triangle pattern.

NZDUSD

The NZDUSD maintained a bullish trend after the latest New Zealand trade numbers. It rose to a high of 0.6900, which is slightly below the key resistance at 0.6925. On the four-hour chart, it has formed a V-shaped recovery and moved above the 25-day and 50-day moving averages. The pair has also moved between the middle and upper lines of the Bollinger Bands. Therefore, the pair will likely keep rising in the near term.