Learn more about these picks and why they could be the biggest plays of the New Year. Here's our top 3 markets in forex right now.
The US is in a constant search for more productivity and supply in the oil market, and they are struggling to find it. As the largest producer and consumer of this commodity, the government and curators are looking for supply elsewhere. In an article by IBD, they mention that Biden and Tehran are in discussions with the potential to increase the amount of barrel supply by 1.4 million.
Another news source show us that pre-pandemic productivity has still not been reached in the US. However, we are expected to increase production by 670,000 bpd in 2022. The problem facing the US is that demand is outweighing supply, and that is causing a rather large move in the oil sector. However, under the Biden administration, oil production was cut setting the stage for higher prices. And if the administration decides against a proposed production increase, analysts fear a $100 price per barrel.
Having this information will help us look at pairs that rely heavily on oil production and demand.
Lower production as of now is putting a weaker and uncertain valuation around the dollar. However, investors expect at least one rate hike in 2022 which they could then price into the dollar's price. Additionally, if the US can manage to boost the amount of barrels manufactured without depending on foreign sources, the USD will get stronger. The dollar index has had a great year so far after reaching as high as 8%
Tensions between Russia and Ukraine have not been pleasant for a while either, and this can have a negative impact on NATO and geopolitical agreements.
Outlook on the loonie looks stronger than the USD right now after the latest take on oil's global supply and production. Canada relies on oil demand more than the United States so a less productive US could help out Canada's currency. So, Canada needs the opposite thing to happen that the USD bulls are hoping for: less production in the US and finding supply elsewhere like Tehran and/or Canada.
All three forex picks have something in common: oil production. Whether or not the US decides to up their supply will undoubtedly affect all three markets. But this also doesn't necessarily mean that one will be better than the other in the New Year. In fact, all three seem like strong picks going into 2022. Biden will likely not try to boost production, and if he does, it will probably not be by a substantial amount.
So, I think it's important to consider a market where oil demand grows, Canada's loonie gets stronger from a higher oil price per barrel, and investors begin to price in the USD after the federal fund rate hikes in 2022. All three have the potential to be very bullish especially if treasury yields continue to increase and omicron fears push through into 2022.
To read our other top picks, check out our market analysis tab on the A1 website here.
Save time looking for setups with the EdgeFinder's watchlist! In a glance, see the EdgeFinder's current top buys and top sells.
As of 9:10 am EST, the 10-Year bond rate is up ~3.50% while the dollar index remains flat. Some big news coming up in the next 24 hours for the USD, EUR and AUD. US consumer confidence is expected to fall from the last reading. We received a strange signal from the EdgeFinder that could […]
This week, we have seen a lot of market swings in sentiment along with uncertainty around economic stability. Because of this mixed mindset, investors have been shifting their interest towards gold. This article will cover why gold could continue to move higher. Medium to high impact news is coming up for all currencies such as […]
There are some major news ahead for the EUR, CAD, AUD and USD pairs this week. Wednesday will be another Fed rate decision forecasted to be another 25 bp. Here are some events set to come out tomorrow: EdgeFinder Analysis UC is still the EdgeFinder's favorite buy score along with USDZAR at +7. Retail is […]
DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here