5 Reasons for the $12 the WTI/Brent Crude Oil Spread. Forex Trading Temporary USD Pullback. USDCHF at Lower Trend Line.

In today’s GCI Market Outlook, let’s take a look at Forex Trading on EURUSD, USDCHF, Gold, XAUUSD, WTI, and Brent Crude Oil.

Just a reminder that these videos are intended as educational, we are only observing current market conditions, and these are not to be considered as trading advice.

We are now watching a very rare situation where price action charts on WTI and Brent are completely different.

We see WTI, still at an elevated price of $93.50, in a descending triangle.

Brent Crude is more affected by the war in Iran, as the Strait of Hormuz is responsible for 20% of the world’s shipping of crude oil, and we saw another price spike up to $119.

The price of Brent has come down, but the WTI/Brent spread is over $12 now, where we normally expect to see $5.

While oil infrastructure in the Middle East is being destroyed, creating a supply issue, the latest WTI inventory report was far higher than analysts’ forecasts, putting downward pressure on WTI.

There is also the fear that the US may start to restrict WTI exports, creating more supply.

And, finally, the US is basically self-sufficient in oil while much of the rest of the world is dependent on the Middle East for seaborne supply.

The bottom line is that we need to see some good news regarding the Strait of Hormuz.

If this happens, we will see the price of Brent Crude Oil falling faster than WTI.

If tensions increase, we should see both oils rising, but with the spread increasing.

While we see overall USD strength, we have had a temporary pullback most noticeably against JPY, EUR, and GBP.

As you know, pullbacks against the trend can give us an opportunity to buy the dip, and I encourage you to look at all USD charts like USDCHF where we see price action at the lower trend line and the stochastic oscillator oversold and turing up.

The USD pullback has mildly affected the price of gold.

Gold is falling due to profit-taking and the fact that the Middle East War is raising inflation fears, which in turn, may mean an interest rate rise.

Many funds are talking about buying the dip on gold, but everyone is waiting for geopolitical tensions to calm down.

That’s all for now.

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