The week begins in clearly better moods. Trump, however, will meet the leader of North Korea, at least this is the current version. In Italy, the President of the Republic blocked the candidacy of Savona (eurosceptic, the supporter of the return to the lira) to take over the portfolio of the Minister of Finance. All currencies except the defensive yen, the franc and the Canadian dollar are gaining against the dollar in such a positive environment, which is clearly threatened by the continuation of the oil depreciation. The euro is today the strongest of the major currencies and gains 0.5%. EUR / USD increased to a maximum of 1.1730. USD / JPY is holding at 109.50, GBP / USD is at 1.3330. The WTI barrel cost even $ 66 a night, more than $6 less than a week ago.
On Monday 28th of May, the event calendar is empty in important data releases. The extended weekend in the USA and Great Britain will probably move traders to the exchange market, with many data, including NFP on Friday, releases during this week. While the day is thin on data releases, the main focus in financial markets will be political chaos in Italy after the Italian President Mattarella last night opposed the proposal for finance minister for the incoming government of Five Star and the League. This raises the prospect for new elections, which would add to market anxiety toward Italy.
Crude Oil analysis for 28/05/2018:
The vision of OPEC raising the extraction limit at the June cartel meeting is still weighing heavily on oil pricing. The WTI rate is currently dropping 2.0% and up to 66.50 USD, but night lows are located even 0.5 USD lower. The sudden drop after a Falling Wedge pattern occurred around the level of 72.84 last week has reached the level of 65.78, just a tad above the technical support at the level of 65.56. Thre market conditions are now oversold, but the momentum is still pointing to the downside. The nearest technical resistance is now the area between the levels of 66.54 - 67.11 and only a clear, impulsive sustained breakout above this zone would give the bulls a chance to test the level of 69.56.