Today we have an interesting opportunity for Oil. Oil has been rising for quite some time now, as the tensions in the Ukraine escalated. The prices are now reaching an important resistance level, and as a result we might witness a pullback in the short term. So, I think selling is a good option moving ahead.
Oil is consolidating in a range, as can be seen in the 4 hour chart below. If the sellers manage to break the range support level, then it might open the doors for further downside acceleration. So, if OIL breaks down and closes below the range support level at around $103, then we can enter into a sell trade.
Initial target should be around $101.50 level, and final target could be somewhere around the $101 level. Stop should be triggered if OIL jumps higher to close back above the broken range support level.
US housing data and Yellen’s speech
There were two important events scheduled in the US session yesterday. The US housing data was released, which missed the expectations and registered a decline. Later, Fed’s Yellen in a speech mentioned few key things. She basically played down the interest rate hike expectations. This resulted in a down-move in the US dollar. The pairs like EURUSD and GBPUSD are trading higher. GBPUSD gained more bids, as the UK employment report published yesterday came better than expected with unemployment rate falling to 6.9%.
Fundamental Outlook for the day
Today, the US initial jobless claims and Philadelphia Federal Reserve Manufacturing Index will be released, which can act as a mover for the US dollar. Let’s see how the US dollar behaves moving ahead, as there is a holiday tomorrow. So, there is a possibility that the dollar might gain bids in the short term. We also have Canadian inflation report lined up later today. This particular event might have a huge impact on the Canadian dollar. So, we need to be very careful trading around this event.