CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.5% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.


Trader thoughts - energy causing gyrations in markets

Chris Weston
Head of Research
Nov 17, 2021
For those who aren’t subscribed to the YouTube channel, I put together a comprehensive view on markets and key event risks headed into December.

Near-term, probably the highlight for me on the session has been the moves in Crude, gasoline and nat gas. Once again, we find ourselves at the mercy of headlines around whether the US and now China will release Crude reserves into the system – the talk is Biden is trying to onboard Xi to join in the reserve dump during their virtual summit – this saw Crude push into $77.71, although the downside was limited by a solid 2.1m barrel draw in the weekly DoE inventory report.

Crude daily


(Source: TradingView - Past performance is not indicative of future performance.)

For Crude traders, the 50-day MA has supported (on the daily) and we see the 4 November swing low also holding, but it’s on shaky ground – If this genuinely cracks then I look for the former highs of $76.95 to come into play and if that goes then I’d be targeting $72 – Let's see how price reacts here. Energy is a key component of the inflation trade.

Oil proxies have been sold and by extension that’s feeding into AUD weakness and the Commodity plays too – AUD is being taken down, with AUDUSD printing a lower low and I’d be moving my stop lower from Monday's short call. AUDJPY should be on the radar as that has had the biggest percentage move in G10 with the JPY finding buyers easy to come by – maybe that’s a cover of the carry trade, but the JPY is universally strong.

Is this a risk aversion move? Perhaps, but there's obviously no panic at all. US Treasuries have caught a bid and we see yields 5bp lower in 10s – the Russell 2k (US2000) is -1.2%, while it was a defensive day in the S&P 500 with energy and financials taking out the point, while REITs, health care and utilities.

Gold has pushed higher with real rates moving a touch lower – XAUAUD has naturally benefited from the weakness in the AUD printing a new high in this run – a factor I touch on the video.

EURGBP has printed a lower low, with UK headline inflation printing 4.2% (vs 3.9% eyed) – it feels like this can hold even though we’ve moved from 0.8560 to sub-0.84 in a matter of days. The rates market now fully prices a 15bp rate hike from the BoE in its 16 Dec meeting.

EURCHF daily


(Source: TradingView - Past performance is not indicative of future performance.)

EURCHF should be on the radar – divergence has come up between price and the RSI – with the SNB potentially ready to intervene, could EURCHF be ready to reverse higher?

Ready to trade?

It's quick and easy to get started. Apply in minutes with our simple application process.

The material provided here has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research we will not seek to take any advantage before providing it to our clients.

Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.