Article Highlights

  • FOMC member Fischer: Fed is ready to adjust to issues during normalization
  • EIA projects that oil production will fall more than expected this year
  • EIA kept U.S. oil demand forecasts unchanged for 2016
  • OPEC to hold emergency meeting if crude oil falls below $30
  • Oil futures testing lows not seen since December 2003
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Forex traders continued to watch oil prices closely in the past few hours, as the commodity dropped to fresh lows once more.

Major Events:

Crude oil selloff on EIA report – Oil slipped to fresh lows yet again, but could this be the line in the sand? WTI crude oil dipped to a low of $29.93/barrel before recovering a touch above $30/barrel while Brent crude oil fell to $30.33 upon seeing the latest revisions in the U.S. Energy Information Administration’s (EIA) forecasts.

The agency predicted that U.S. crude oil production would fall to an average of 8.7 billion barrels per day, down from the previous 9.4 billion barrels per day in 2015. On a more positive note, the EIA also estimated that crude oil prices would average at $38.54/barrel this year and at $47/barrel next year.

OPEC intervention? In other oil-related news, the Nigerian oil minister hinted that the OPEC might hold an emergency meeting if oil tumbles below $30/barrel but the UAE was quick to dispell these rumors. Bummer.

Keep in mind that even though some of the smaller oil-producing nations such as Nigeria and Iran have been urging for production cuts in order to put upward pressure on prices, the hotshots over at Saudi Arabia and the UAE would rather endure the drop in profitability just to edge out the competition from U.S. producers.

Major Currency Movers:

CAD – Yep, the Loonie is hogging the forex spotlight once more, although the commodity currency appears to be exhausted from its recent dives.

USD/CAD popped up to new highs at 1.4313 before retreating to the 1.4250 area, CAD/JPY dipped to a low of 82.07, EUR/CAD tested the resistance at the 1.5550 minor psychological mark once more but continues to move sideways, and GBP/CAD is still cruising around 2.0600.

GBP – Speaking of the pound, the British currency’s pounding didn’t stop during the rest of the U.S. trading session, as forex junkies braced themselves for a potentially downbeat BOE statement later on.

GBP/USD cemented its decline below the 1.4400 handle but bounced off a low of 1.4351, GBP/JPY is still trying to make a strong break below 170.00 after dipping to 169.08, and EUR/GBP seems to be safely outside its long-term range after trading above .7500.

Watch Out For:

  • 2:00 am GMT: U.S. President Obama’s State of the Union address (It’s his last one, you guys!)
  • Chinese trade balance (339B CNY expected, 343B CNY previous. Pay close attention to the imports and exports figures!)

See more:

Asian Session Recap

London Session Recap

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Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!