While Many Americans are celebrating cheap gas prices and even showing their confidence that the prices will remain low by buying trucks and SUVs more than ever, Mr. Putin is hoping for the prices to go back up. We understand however that Mr. Putin’s policies generally have nothing to do with the Russian people, and that the recent turmoil hurts the people more than the government.
Vladimir Putin made his annual year-end address yesterday, which has been labelled by some as an embarrassing return to Soviet era propaganda. Mr Putin repeatedly blamed the West for Russia’s economic woes and warned that there could be two years of recession ahead. Rather than propose any solutions to the economic troubles Mr Putin is relying on oil prices returning to their former highs, despite earlier in the speech admitting that Russia has been too reliant on oil and gas and hasn’t done enough to diversify.
According to some analysist, Russia’s banks are going to need bailing out in the very near future. Russian banks are so nervous about lending to each other that the rate on short term interbank lending is now nearly 30%. With a lack of viable funding between them, banks will have to go cap in hand to the Kremlin for Dollar support which will in turn force the Kremlin to implement capital controls on businesses to manage the supply of foreign currency which the banks are so desperately short of.
Matteo Renzi believes that there is absolutely nothing to gain from further sanctions being placed on Russia and he’s probably right. The Italian PM has said ‘absolutely no’ to new sanctions being talked about, whilst France has been the first to put the idea out there to lift some sanctions. Francois Hollande’s position puts him at odds with the majority of other European leaders, particularly David Cameron who will only consider talking “if Russia changes its behaviour”.
In the UK, North Sea oil is nearing crisis with such low prices, apparently. According to Brindex, the exploration association, oil below $60 means no new investment can be made and existing business needs to be restructured and costs reduced, probably through staff cuts, to maintain economically viable supply. This news may or may not be offset entirely by the wider economic benefits of cheaper fuel prices, but remains to be seen.
Intraday Forex Technical Levels
GBP/USD 4-hour: Consolidating.
Invest Diva positioning: Short positions below 1.5631 with targets at 1.5562 and 1.5474 in extension.
Technical reasons why: The pair is consolidating in the Ichimoku’s cloud. A break above the Ichimoku’s cloud would give a further up-moves. The RSI is below the neutrality area.
Alternative Scenario: Above 1.5631 look for further upside toward 1.5709 and 1.5800.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 1.5562 | 1.5631 | 1.5800 |
| 1.5474 | 1.5709 |
AUD/USD 4-hour: Downtrend prevails.
Invest Diva positioning: Short positions below 0.8183 with targets at 0.8102 and 0.7977 in extension.
Technical reasons why: The pair continues to move within the bearish channel below the Ichimoku’s cloud. The RSI is moving below the neutrality area.
Alternative Scenario: Above 0.8183 look for further downside towards 0.8248 and 0.8318.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 0.8102 | 0.8183 | 0.8248 |
| 0.7977 | 0.8318 |
NZD/USD 4-hour: Testing 50% Fibonacci level.
Invest Diva positioning: Long positions below 0.7790 with targets at 0.7834 and 0.7887 in extension.
Technical reasons why: The pair is testing the 50% Fibonacci level at 0.7790, supported by the Ichimoku’s cloud. The RSI is above the neutrality area.
Alternative Scenario: Above 0.7790 look for further upside towards 0.7747 and 0.7694.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 0.7747 | 0.7790 | 0.7887 |
| 0.7694 | 0.7834 |
USD/CAD 4-hour: Testing above the pivot level
Invest Diva positioning: Long positions above 1.1600 with targets at 1.1665 and 1.1791 in extension.
Technical reasons why: The pair broke above our pivot level at 1.1600 above the Ichimoku’s cloud. The RSI is also above the neutrality area.
Alternative Scenario: Below 1.1600 look for further downside towards 1.1537 and 1.1457.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 1.1537 | 1.600 | 1.1791 |
| 1.1457 | 1.1665 |
EUR/USD 4-hour: Reached out bearish target!!
Invest Diva positioning: Short positions above 1.2246 with targets at 1.2165 and 1.2056 in extension.
Technical reasons why: The pair broke below the previous bottom at 1.2246 below the Ichimoku’s cloud. The RSi is at the oversold zone.
Alternative Scenario: Above 1.2246 look for further upside towards 1.2360 and 1.2474.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 1.2165 | 1.2246 | 1.2474 |
| 1.2056 | 1.2360 |
USD/CHF 4-hour: Broke above a key resistance level
Invest Diva positioning: Long positions above 0.9816 with targets at 0.9896 and 0.9963 in extension.
Technical reasons why: The pair broke above the previous top at 0.9816 and continues to move up above the Ichimoku’s cloud. The RSI is above the overbought zone.
Alternative Scenario: Below 0.9816 look for further downside towards 0.9770 and 0.9719.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 0.9719 | 0.9816 | 0.9963 |
| 0.9779 | 0.9896 |
