Top charts for this week - USFang, Oil, USD Index

Summary:

  • FANG+ (USFANG on xStation5) gained over 25% since the bottom in December

  • Oil (OIL) benefits from increased risk appetite

  • US dollar index (USDIDX) seems to be catching a bid

There is no doubt that tech stocks, being gathered in the so-called FANG+ index (USFANG) have been the prime drivers of the bull market in the US in recent years. However, a sell-off we saw at the end of the past year affected the tech stocks markedly. Nowadays the tech stocks are doing better again and the USFANG jumped more than 25% after bottoming in December. On a daily chart we may that the index has moved out of the bearish channel (the red lines seen below) and now it is heading toward the 200DMA. In addition, the bearish trend line could provide a support for bears there. Bulls may look for some positive signals in the possible inverted head and shoulders pattern. Currently the price is hovering around the 50% retracement, this level also coincides with the high from late November. As a result, one may suppose that bulls could face some obstacle in trying to break above this level. USFANG is available in the XTB offer, you can find out more about this instrument HERE.

Source: xStation5

Looking at the oil market we may spot that bulls have been battling around $63/64 since the mid-January. The possible neckline of the inverted head and shoulders pattern can be identified around this level too. If bulls are able to move through this lie, it could provide them with power to heading higher. From a fundamental point of view oil prices are being supported by increased risk appetite as well as rising hopes regarding a trade deal between the US and China. On top of that, lowered exports of crude from Venezuela also act in favour of higher crude prices. Finally let’s recall that the API report will be published this evening, and the DoE will release its own report tomorrow afternoon.

Source: xStation5

The last instrument we are focusing on today is the US dollar index (USDIDX). Note that despite a dovish tone from the Fed the US dollar did not tank. The USDIDX is trying to bounce off the lower limit of the channel. Until the price keeps moving within the mentioned channel, one may suppose that bulls could prevail. It needs to be said that the index drew a ‘higher bottom’ which could bode well for buyers. There is no doubt that better data from the US could support the US dollar which would then revive expectations about subsequent rate hikes.

Source: xStation5
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