Tuesday, July 16, 2024
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OPEC+ announces gradual supply increase, NVIDIA unveils new accelerator

by xyonent
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  • Oil prices fell as the European Cash Open approached. Oil prices fell for the fourth consecutive day, dropping by almost 4.00%.
  • OPEC+ member states have signaled that the group has the option not to continue its voluntary production cuts beyond September.
  • All US and global indexes will open Monday trading higher after a weak end to May 2024. The bullish price differentials indicate a potential “risk-on” market.
  • NVIDIA has unveiled its next-generation accelerator chips and promised annual upgrades. NVIDIA shares were already up 0.55% in pre-market trading.

USOil – Voluntary cuts may be fading!

Oil prices fell by about 4.00% in the last three days of last week due to the OPEC+ meeting. The meeting ended and journalists have noted two important points. The first is that the OPEC+ group will maintain production limits as they have since COVID-19. The second is that countries that have voluntarily made additional production cuts will have the option to reduce them after September.

According to analysts, the market does not necessarily need to “overreact” because even if OPEC+ does increase supply, it will be gradual. Moreover, analysts advise that the group will only consider resuming production if market conditions allow. Nevertheless, analysts acknowledge that traditionally, additional supply puts downward pressure on the commodity. This has been seen in the past week, and investors will be eager to see prices drop below support levels.

Support levels have been important psychological levels for investors throughout May, particularly on three occasions. Prices are currently below the 50.00 RSI and below most long-term moving averages. Momentum would suggest further declines are possible if prices fall below the 65.00 Fib level at $76.70 per barrel.

USA100 – NVIDIA unveils new acceleratoror Tip!

The Nasdaq struggled last week, dropping more than 3.00% at one point. However, a surge in buyers near the end of trading on Friday led to a strong rebound, and the index also rose in Asian trading today. The Nasdaq is currently being influenced by three factors. However, investors will also be focusing on pricing interest rate adjustments after the US employment data.

The first factor encouraging investors to increase their investment in tech stocks is NVIDIA. The company’s CEO reiterated that the technology and AI market will continue to grow and become more aggressive. In addition, Huang said that NVIDIA will release new accelerator chips and promises more to come within the next year.

The second positive for the Nasdaq, as well as global indexes, is that most analysts believe the European Central Bank will cut interest rates for the first time in the current cycle. If more global banks decide to ease monetary policy tightening, stocks will become more attractive, but only if the move is not in response to a potential economic contraction.

Finally, investors are also taking advantage of the low entry point and feeling that sentiment is improving as oil prices fall. Investors are hoping that lower oil prices will ease upward pressure on inflation.

If the price rises above $18,638.83, a bullish breakout pattern will form that indicates an uptrend. However, to achieve a stronger and longer-term bullish trend, investors would like to see the price rise above the 75-bar EMA and the 100-bar SMA. These two moving averages currently stand at $18,658.28 and $18,733.30.

Mihalis Efthymiou

Market Analyst

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