Edward Moya, senior market strategist at Oanda, is giving battered investors hope on two counts. First, the US Federal Reserve whose every move and every statement is watched by everyone. Second, crude oil prices are below their 50-, 100- and 200-day moving averages despite a rebound in reaction to Opec+ cuts.
In addition, a series of negative divergences between the price of North Sea Brent and its quarterly momentum have materialised for the past eight months, followed by a break below its equilibrium line by momentum.
“Crude prices tumbled after reports that Russia was willing to sell oil at a discount. Russian seaborne oil deliveries are about to have a price cap put in place and it looks like Russia is getting desperate for revenues. Last month, Russia was threatening they would stop selling oil to countries that would agree to use a price cap, but now it seems like that was just a bluff,” Moya writes in an Oct 13 market update. He has a point.