Market Review 06 May 2020

by Constantinos Loizou

  • In today’s economic calendar we can expect to see some volatility in the GBP, EUR, USD and Crude Oil
  • At 08:30 (GMT), the Chartered Institute of Purchasing and Supply (CIPS) Construction Purchasing Manager's Index (*PMI) for the United Kingdom will announce their results.
  • The result is forecasted in an decrease to 22, considering that last month was at 39.3.
  • At 09:00 (GMT), the Statistical office of Eurozone (*Eurostat) will release the Retail Sales of Eurozone
  • The result is forecasted in a decrease to -10.5%, considering that last month was at 3%.
  • At 12:15 (GMT), the Automatic Data Processing of USA (*ADP) will release the figures for the Employment Change regarding the previous month.
  • The result is forecasted in a decrease to -20,050K. considering that last month was -27K.
  • At 14:30 (GMT), the U.S Energy Information Administration (*EIA), will release the number of Crude Oil stock Change
  • The result is forecasted in a decrease to 8.125M, considering that last week was at 8.991M

 

* The Purchasing Managers Index (PMI) measures the activity level of purchasing managers in the construction industry. It gives an indication about the health of the construction section in the UK.

* Eurostat  is a Directorate-General of the European Commission located in Luxembourg. It’s main responsibilities are to provide statistical information to the institutions of the European Union (EU).

*Automatic Data Processing, commonly known as ADP, is an American provider of human resources management software and services.

*EIA is responsible for collecting, analysing, and announcing energy information to help in policymaking, efficient markets, and public understanding of energy and its interaction with the economy and the environment.

 

On the charts

  • As we can observe on the Crude Oil daily chart, the price has formed a nice downward channel
  • That channel, and the 61.8% Fibonacci Retracement Level (From 33.11 to 6.36) has been broken in yesterday’s trading session
  • The price is now at $24.24
  • Since Force Index* is still below zero, a pull back to the 61.8% or lower to the channel cannot be ruled out
  • If the price finally remains above our channel, we might see the price moving higher to $43, a price level which consists the 61.8% Fibonacci Retracement Level (From 65.61 to 6.36) and the Target of our channel

*Force Index is an indicator used in technical analysis to illustrate how strong the actual buying or selling pressure is. High positive values mean there is a strong rising trend, and low values signify a strong downward trend.