Historic oil price decline shocks financial markets
Crude oil suffered its worst-ever weekly decline this week as the price of oil per barrel actually turned negative. Bearish futures pricing and capitulation in the global travel and automobile markets weighed heavily on the oil market. Oil also faced the issue with storage costs, as dwindling global demand causes ports to store huge amounts of unused oil supplies. Analysts feared that the crash in oil prices could continue as the world is faced with an unprecedented slowdown due to the coronavirus.
- WTI oil is only bearish while trading below the $25.50 level, key support is found at the $10.00 and $5.00 levels.
- If WTI oil trades above the $25.50 level, buyers may test towards the $32.00 and $38.00 resistance levels.
Speculation surrounding the upcoming Bitcoin halving event continued to drive the cryptocurrency market this week as traders increased bets on the outcome of the much-anticipated event. Bitcoin reversed sharply lower in early week trading due to the crash in oil prices, however, the number one cryptocurrency eventually recovered and rallied to the $7,700 level. Etheruem also pulled back in early week trading and eventually recovered back towards its 200-day moving average. Bitcoin’s halving event is now less than three weeks away and is set to generate significant trading volatility for the crypto market.
- The BTCUSD pair is only bearish while trading below the $7,000 level, key support is found at the $6,500 and $6,000 levels.
- If the BTCUSD pair trades above the $7,000 level, buyers may test towards the $7,700 and $8,100 resistance levels.
The euro currency continued to weaken against the US dollar this week over fears about the health of the Italian economy and weak PMI Manufacturing data. Fears over Italy’s debt burden caused the EURUSD pair to slump back under the 1.0800 support level. The euro currency also weakened after the April French PMI showed a reading of 10.0, which marked its weakest ever level of economic activity for the European Union's second-largest economy. Germany also recorded a historic low Manufacturing reading as global demands for exports continued to drop.
- The EURUSD pair is only bullish while trading above the 1.0880 level, key resistance is found at the 1.0940 and 1.0990 levels.
- The EURUSD pair is only bearish while trading below the 1.0880 level, key support is located at the 1.0770 and 1.0550 levels.
Metals suffered a weak of volatile trading activity as both gold and silver plunged lower and made a sudden recovery to the upside. Gold fell towards the $1,650 level and then made an abrupt reversal back above the $1,700 resistance level as bulls targeted back towards the current 2020 trading high, just below the $1,750 level. Silver prices also plunge lower in early week trading, and eventually settled back above the $15.00 level. A closure of mining facilities and central bank money printing is expected to keep gold and silver prices well-supported.
- The USDJPY pair is only bullish while trading above the 106.90 level, key resistance is found at the 108.40 and 110.00 levels.
- If the USDJPY pair trades below the 106.90 level, key support is located at the 105.50 and 103.80 levels.