Oil Plummets, Indices Correct, and Yen Reverses: A Recap of this Week's Market Trends

Oil Plummets, Indices Correct, and Yen Reverses: A Recap of this Week's Market Trends
This week has been marked by a bearish correction on indices and commodities, with particular interest surrounding the drop in oil prices. Three weeks ago, OPEC+ made a surprise output cut announcement, resulting in a bullish gap at the start of trading on Monday 3rd. However, as we warned, gaps tend to be closed, and this week saw oil prices plummet almost every hour, with the gap yet to be fully closed.
Although indices are also in correction mode, the slide has been more controlled and flat, demonstrating the strength of buyers and indicating that these moves are likely just take-profit actions, rather than a larger reversal. After a cooldown period, indices should return to their gains soon.

On Friday, we saw a decisive reversal on the Yen, which had been losing in the first half of the week. This reversal has led to legitimate technical trading opportunities, such as the AUDJPY bouncing off a key downtrend line, providing a signal to sell, and the GBPJPY bouncing off the upper line of the channel up pattern, switching sentiment into a negative one.

The calendar for today is packed with Manufacturing and Services PMIs from almost all leading economies in the world. Thus far, data has been mixed, but a pattern has emerged, with Manufacturing numbers coming in worse than expected and way below 50, while Services have surprised positively and are way above 50. Later today, we can expect PMIs from the US and retail sales data from Canada.

Overall, this week's market trends have been marked by a bearish correction on commodities and indices, with oil prices in particular experiencing a significant drop. However, there are still opportunities for technical trading, such as the recent reversal on the Yen, and the calendar for today is filled with important economic data that could further influence market movements.
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