Natural Gas and Oil Forecast: Middle East Tensions and Tariff Threats Stir Markets

Commodity

Middle East Situation

Summary:

Oil rose above \$63 as Middle East tensions and U.S. tariff threats stirred markets. OPEC+ supply limits, rising inventories, and technical signals suggest cautious upside for crude and natural gas.

Market Overview

WTI crude oil futures climbed above $63 per barrel on Wednesday, marking a third consecutive session of gains. The rise was fueled by renewed geopolitical concerns that raised the risk of supply disruptions.

Middle East Tensions Escalate

Oil traders reacted to news that Israel struck Hamas leadership in Doha, Qatar, expanding its regional campaign just hours after threatening Gaza City. Over the past two years, Israel has also conducted operations in Iran, Syria, Lebanon, and Yemen, keeping markets on edge about potential escalation.

Supply Dynamics and OPEC+

The geopolitical backdrop added to existing price drivers, including OPEC+’s decision to modestly increase production for October. The move was significantly smaller than prior monthly hikes, reinforcing expectations of tighter supply into the year’s end.

Trade and U.S. Policy Pressure

Global trade tensions also weighed on sentiment. Reports suggest U.S. President Donald Trump has pushed the EU to impose 100% tariffs on Chinese and Indian goods as leverage against Russia, with the U.S. prepared to match any such measures.

This raised concerns about potential disruptions to global demand and trade flows.

Inventory Data Signals Build

On the supply side, U.S. industry data showed crude oil inventories rose by 1.25 million barrels last week, following a 0.62 million-barrel build previously. Rising stockpiles may limit upside momentum if supply concerns ease.

Natural Gas Price Forecast

Natural Gas (NG) Price Chart

Natural gas is trading near $3.11, consolidating after a steady climb within a rising channel on the 4-hour chart. The move is supported by the 50-EMA at $3.04, which continues to act as dynamic support, while the 200-EMA at $3.08 is being tested as resistance. A close above this zone could clear the path toward $3.19, the next key horizontal barrier.

Momentum remains constructive, with the RSI at 54 holding in neutral territory, suggesting room for further upside without immediate overbought risk. If buyers maintain control, price could extend toward the channel top near $3.20–$3.28.

On the downside, a break below $3.02 would weaken the structure and expose support at $2.95 and $2.87.

To understand the dynamics of oil and natural gas markets, traders must first explore What Drives Oil Prices (And Why It Matters to You as a Trader).

WTI Oil Price Forecast

WTI Price Chart

WTI crude oil is trading near $63.29, consolidating after a recovery from the recent low at $61.44. The 4-hour chart shows price reclaiming the 38.2% Fibonacci level at $63.20, with the 50-EMA offering nearby resistance at $63.33. A break above this zone could open the path to $63.74 and the 200-EMA at $64.25, where stronger sellers may reappear.

Momentum is stabilizing, with the RSI at 52 holding above its signal line, suggesting modest upward pressure. If price fails to sustain above $63.20, downside risk increases toward $62.53.

For now, holding above $63.20 favors a gradual move higher, but a rejection at the moving averages could keep crude oil in a range.

Brent Oil Price Forecast

Brent Price Chart

Brent crude oil is trading near $67.03, holding steady after recovering from the recent low at $65.08. The 4-hour chart shows price climbing back above the 50% Fibonacci retracement at $66.75, with immediate resistance sitting at the 61.8% level near $67.14. Clearing this zone could open the way toward the 200-EMA at $67.50 and the higher resistance at $68.42.

Momentum is improving, with the RSI at 54 trending upward, suggesting buying strength is building without overbought pressure. On the downside, support rests at $66.35, and a break below this would expose $65.87.

As long as price holds above $66.75, the short-term bias favors further gains toward the $68 area.

Source: fxempire

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Winkelmann

Economic

Political

Latest news on the Israeli-Palestinian conflict

The Iron Beam costs a mere $2 per interception, meaning it is cheaper than the Iron Dome.Israel’s Iron Beam missile shield was displayed at the DSEI 2025 defense show in London earlier this month. The unprecedented defensive technology has been used recently in the ongoing Gaza War, making its public appearance at the exhibition even more significant. The Iron Beam and its components, including the Naval Iron Beam, the Lite Beam, the mobile Iron Beam-M, and the Iron Beam 450, are designed to intercept and destroy a vast array of aerial threats with precision. Considering the technology’s near-zero per-interception cost and reduced collateral impact, the Iron Beam will surely play a major role in Israel’s air defense strategy going forward.

As explained by Brig. Gen Daniel Gold, the head of the Israeli Defense Force’s (IDF) Directorate of Defense Research and Development, “Israel is the first country in the world to present a large-scale operational laser interception capability. The vision of the laser was demonstrated during the war with immense operational and technological success.”

What We Know About the Iron Beam

The Iron Beam has gained widespread media attention in recent months following its premiere combat interceptions in May. Developed by Israeli defense contractor Rafael Advanced Defense Systems, the impressive directed-energy weapon air defense system truly embodies what it means to be a futuristic technology. The Iron Beam is largely connected to the US Strategic Defense Initiative, formed under the Ronald Reagan administration in the 1980s. Known as the “Star Wars” program, the proposed missile defense system included studies of advanced weapons concepts. However, the program was ultimately nixed due to technological shortfalls of the time. Israel continued to research the possibility of such weapons and was able to build a prototype for its Iron Beam program back in 2014. The Iron Beam uses a solid crystalline material to focus the beam, rather than gas or liquid, like many earlier directed-energy weapons prototypes designed in the 1980s. Since the Israeli defense system reportedly costs a mere $2 per interception, it clearly represents a cheaper alternative to its counterparts like the Iron Dome.

What About Israel’s Other Air Defense Systems?

The Iron Beam may be more cost-friendly and futuristic than its sister air defense systems in Israel, but the directed-energy weapon cannot replace the work of the Iron Dome, the Arrow 2/3 systems, or David’s Sling. The Iron Dome functions as Israel’s first layer of defense. Specializing in taking out short-range rockets and other projectiles, the Iron Dome has been an effective measure in countering the mass barrages launched by Hamas and Hezbollah. David’s Sling is the middle layer in Israel’s defense apparatus, designed to counter the threat of medium to long-range rockets. The crux of the weapon system is the Stunner missile, which, according to Raytheon, is proven to defeat at least 92 percent of the worldwide ballistic missile threat inventory. Israel’s Arrow systems were developed to intercept long-range missiles by operating outside the atmosphere and make up the highest tier of the IDF’s air defense.

Source: The National Interest

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Adam

Economic

MARKET WRAPS

Stocks:

European stocks rose on Wednesday, gaining on Tuesday's largely positive close, as investors remained unfazed by France's political turmoil and awaited fresh producer price inflation data from the U.S.

French stocks posted gains despite the looming challenge for the country's new prime minster to pass a budget in a politically fractured National Assembly.

"There are no signs that this task will become easier, with the far-right and far-left maintaining calls for snap elections," Deutsche Bank said.

Meanwhile, there were fresh geopolitical concerns after Poland, a NATO member, said it downed drones which crossed into its airspace after a Russian attack on Ukraine. European defense stocks posted gains.

According to media reports , Trump called on the EU to hit China and India with tariffs to pressure Moscow to end the war in Ukraine.

Stocks to Watch

Thales and Dassault Aviation lead gains among European defense companies while Rheinmetall, Leonardo and BAE Systems posted more marginal progress after the downing of drones by Poland's military inside the country.

Rival miners might come bidding for Teck Resources but Anglo American is the preferred suitor, according to Berenberg. It added that BHP Group and Glencore could also bid for Teck.

Economic Insight

The European Central Bank was expected to leave rates unchanged on Thursday, but a 25-basis-point interest-rate cut in December is still possible, Natixis said.

This would happen if the labor market softened more severely than expected and if inflation fell well below target, it added.

Europe's central bank was in a comfortable position and has no need to change its monetary stance , Berenberg said, adding the economy has been more resilient than expected and that trade policy uncertainty has somewhat decreased.

The ECB's upcoming meeting was "likely to be one of the more uneventful ones, with the deposit rate widely predicted to stay at 2.0%."

More direct intervention by the ECB into France's bond market was unlikely to soon materialize given restrictions on using the bank's liquidity tools, Aberdeen said.

U.S. Markets

Stock futures pointed to a mostly stronger open ahead of highly-anticipated inflation data. The figures will offer clues of how tariff-related costs have risen, according to Danske Bank.

Forex:

The euro traded flat against the dollar, barely reacting to the appointment of Sébastien Lecornu as France's Prime Minister. The dollar continued to drive the euro-dollar exchange rate, according to Commerzbank.

The dollar fell slightly against a basket of currencies as investors weighed a bigger-than-expected downward revision to U.S. jobs data and awaited inflation figures which Commerzbank said will be closely watched.

The dollar traded in a narrow range as investors monitored President Trump's response to Poland shooting down drones.

Resorting to tariffs to pressure Russia to negotiate on Ukraine could weigh on the currency, CBA said.

Sterling gained against the both dollar and the euro and should remain driven by dollar moves and risk sentiment, Monex Europe said.

Bonds:

Bonds in the eurozone's second-largest economy were little changed by the appointment of Lecornu as France's fifth prime minister in under two years.

Bunds were expected to trade without clear direction ahead of the ECB's monetary policy meeting on Thursday, Commerzbank said.

Eurozone government bond yields were little changed, according to LSEG data.

Treasury yields edged higher ahead of producer price inflation data expected later and consumer price inflation figures set for Thursday.

"This time, the PPI will attract even more attention than usual both because it is released ahead of the August CPI and because the previous July release surprised significantly to the upside," Danske Bank said.

Yields on U.K. government bonds edged lower on fears of an escalation of the conflict in the Middle East, Tickmill Group said .

Metals:

Spot gold rose and prices could hit $3,800 an ounce by the end of the year, according to ANZ Research. It added that it expected continued growth in gold ETF holdings and said that central bank purchases were also likely to accelerate.

Gold futures rose, boosted by bets of accelerated interest-rate cuts and heightened demand for safe-haven assets.

Energy:

Oil prices rose after Israel attacked Hamas's leadership in Qatar and Trump reportedly urged EU officials to impose tariffs on buyers of Russian oil.

"The risk of regional spillover is rising," Rystad Energy said.

"Much will depend on Qatar's response--as both a close U.S. ally and a key GCC [Gulf Cooperation Council] member, its next steps will shape the trajectory of regional dynamics."

EMEA HEADLINES

Wegovy Maker Novo Nordisk to Cut 9,000 Jobs

Novo Nordisk downgraded its guidance for the second time in six weeks as it announced a restructuring plan that will see it cut around 11% of its workforce to save $1.3 billion a year.

The move is the first by new Chief Executive Mike Doustdar as he tries to revive the Danish company's fortunes following recent challenges in the booming weight-loss market.

Klarna Prices IPO Above Range, Boosting Valuation to $15.1 Billion

Klarna set its initial public offering price above the estimated range amid strong demand, boosting its valuation to $15.1 billion.

The offering comes months after the specialty lending and online payments provider backed out of its listing plan. The company, which had been planning a listing for years, paused the plans in April amid market uncertainty after the Trump administration's sweeping tariff announcements.

Jean Paul Gaultier Owner Puig Posts Higher Revenue, Appoints Deputy CEO

Jean Paul Gaultier owner Puig Brands posted a higher net profit and sales for the first half, lifted by strong growth in the Americas and the Asia-Pacific.

The Barcelona-based group, home to brands including Carolina Herrera and Nina Ricci, said net profit jumped nearly 79% on year to 275 million euros ($323.5 million). The company said the increase was due to costs related to its initial public offering in 2024 and the lack of comparable expenses this year. Higher sales also contributed.

Inside Israel's Audacious Airstrike on Hamas Leaders in Qatar, a U.S. Ally

Hamas's senior leaders-long hiding in host countries across the Middle East-flew this past weekend to the group's headquarters in the Qatari capital of Doha. On the agenda: a new U.S. cease-fire plan for Gaza, apparently with Israeli backing.

Israel had vowed to track down and kill every Hamas member involved in the Oct. 7, 2023, attacks that left 1,200 Israelis dead and some 250 hostages taken, but hitting them in Qatar, a Gulf ally of the U.S., was off limits. Now, Israeli officials had a shot and decided no taboo would stop them from taking it-even at the risk of straining relations with the Trump administration.

GLOBAL NEWS

China's Deflationary Woes Continue Unabated

China's deflationary pressures persisted in August, with a gauge of consumer prices slipping back into contraction as an uncertain growth outlook dents sentiment.

The country's consumer-price index fell more than expected last month, underlining worries that deflation may be becoming entrenched.

Fitch Ratings Nudges Up Global Growth Outlook for 2025

SYDNEY-Fitch Ratings has nudged up its world growth outlook for 2025 despite growing gloom about the U.S. economic outlook, saying China and Europe aren't as downbeat as earlier thought.

There is now clear evidence that the U.S. economy is slowing, and world growth will still be significantly weaker this year, it said.

Judge Blocks Trump From Removing Fed Governor Lisa Cook

A federal judge late on Tuesday blocked President Trump from removing Lisa Cook from the Federal Reserve Board of Governors while a lawsuit challenging her firing proceeds.

Judge Jia Cobb in Washington, D.C., granted Cook's request for a temporary court order to keep her seat on the central bank's seven-member board for now. The decision comes just days before the Fed's next meeting, set for Sept. 16-17.

Supreme Court Agrees to Fast-Track Trump's Tariff Appeal

The Supreme Court agreed Tuesday to quickly hear the Trump administration's bid to save its sweeping global tariffs, setting the stage for a final ruling on a cornerstone of the president's economic agenda.

The court in a brief order said it would hear the case in early November, a schedule that could deliver a ruling before the end of the year.

Princeton Doctoral Student Freed After Being Kidnapped in Iraq

Elizabeth Tsurkov's ordeal began more than two years ago when the Princeton University Ph.D. candidate was kidnapped from a cafe in Baghdad where she had gone to carry out field research.

It ended Tuesday when she appeared unexpectedly near the American embassy in Baghdad showing the wear and tear of her 903 days in captivity, a U.S. official said.

Health Officials Hunt for Cases Connecting Covid Shot and Harm in Pregnant Women

WASHINGTON-Top health officials under Robert F. Kennedy Jr. are compiling examples of harmful effects of Covid shots on pregnant women to share with the public, people familiar with the matter said, furthering the administration's scrutiny of vaccines and a debate with GOP lawmakers over their efficacy.

Food and Drug Administration Commissioner Marty Makary and one of his top deputies, vaccines chief Vinay Prasad, are seeking to waive privacy protections around certain data on Covid vaccines and pregnant women, people familiar with the matter said. That might allow the administration to publicly highlight more detail on what they see as potential harms of the shots, the people said.

Trump Executive Action Cracks Down on Pharmaceutical Ads

WASHINGTON-President Trump on Tuesday signed an executive action calling for stepped-up federal enforcement of rules for pharmaceutical ads.

Source :morningstar

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Risk Warnings and Disclaimers

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Michelle

Commodity

In an oil and gas report sent to Rigzone late Monday, Macquarie strategists, including Walt Chancellor, revealed that they are forecasting that U.S. crude inventories will be up by 2.8 million barrels for the week ending September 5.

“This follows a 2.4 million barrel build in the prior week, with the crude balance realizing looser than our expectations,” the strategists said in the report.

“For this week’s balance, from refineries, we model a slight reduction in crude runs (-0.1 million barrels per day). Among net imports, we also model a slight decrease, with exports (-0.6 million barrels per day) and imports (-0.7 million barrels per day) lower on a nominal basis,” they added.

Timing of cargoes remains a source of potential volatility in this week’s crude balance, the Macquarie strategists warned in the report.

“From implied domestic supply (prod.+adj.+transfers), we look for a slight increase (+0.1 million barrels per day) on a nominal basis this week,” they said.

“Rounding out the picture, we anticipate a similar increase (+0.5 MM BBL) in SPR [Strategic Petroleum Reserve] stocks this week,” they added.

The Macquarie strategists went on to state in the report that, “among products”, they “look for a small gasoline draw (-0.6 million barrels) with builds in distillate (+3.3 million barrels) and jet (+1.2 million barrels)”.

“Amidst holiday effects, we model implied demand for these three products at ~13.9 million barrels per day for the week ending September 5,” the strategists said in the report.

In its latest weekly petroleum status report at the time of writing, which was released on September 4 and included data for the week ending August 29, the U.S. Energy Information Administration (EIA) highlighted that U.S. commercial crude oil inventories, excluding those in the SPR, increased by 2.4 million barrels from the week ending August 22 to the week ending August 29.

The EIA report showed that crude oil stocks, not including the SPR, stood at 420.7 million barrels on August 29, 418.3 million barrels on August 22, and 418.3 million barrels on August 30, 2024. Crude oil in the SPR stood at 404.7 million barrels on August 29, 404.2 million barrels on August 22, and 379.7 million barrels on August 29, 2024, the report highlighted.

Total petroleum stocks - including crude oil, total motor gasoline, fuel ethanol, kerosene type jet fuel, distillate fuel oil, residual fuel oil, propane/propylene, and other oils - stood at 1.670 billion barrels on August 29, according to the report. Total petroleum stocks were up 7.6 million barrels week on week and up 20.6 million barrels year on year, the report showed.

In a market analysis sent to Rigzone on September 5, Li Xing, Financial Markets Strategist Consultant to Exness, said, “sentiment deteriorated following the latest report from the Energy Information Administration, which revealed an unexpected 2.4 million barrel increase in U.S. crude inventories”.

“This directly contradicted analyst forecasts for a 1.8 million barrel draw and bolstered the case for weakening domestic demand,” Xing added.

In an oil and gas report sent to Rigzone by the Macquarie team on September 2, Macquarie strategists, including Walt Chancellor, revealed that they were forecasting that U.S. crude inventories would be down by 1.1 million barrels for the week ending August 29.

The EIA’s next weekly petroleum status report is scheduled to be released on September 10. It will include data for the week ending September 5.

The report states that it provides timely information on supply and selected prices of crude oil and principal petroleum products. On its website, the EIA notes that it collects, analyzes, and disseminates independent and impartial energy information to promote sound policymaking, efficient markets, and public understanding of energy and its interaction with the economy and the environment.

Source: Rigzone

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Winkelmann

Economic

Cryptocurrency

Forex

Are you tracking the pulse of the crypto market? The latest buzz is all about the Altcoin Season Index, which has just surged to 56! This significant move signals a potential shift in market dynamics, making it a crucial indicator for every crypto enthusiast and investor. Understanding this index can provide invaluable insights into where the market might be heading next.

What Exactly is the Altcoin Season Index?

The Altcoin Season Index, meticulously compiled by CoinMarketCap, serves as a vital barometer for the cryptocurrency market. It helps us understand whether altcoins are generally outperforming Bitcoin or vice versa. This index isn’t just a random number; it’s a carefully calculated metric designed to provide clarity in a complex market.

● It compares the price performance of the top 100 cryptocurrencies by market capitalization.

● Crucially, it excludes stablecoins and wrapped tokens to ensure a pure assessment of market sentiment and genuine growth.

● The performance of these altcoins is measured against Bitcoin over the past 90 days.

The recent rise of the Altcoin Season Index by four points from the previous day to 56 suggests growing momentum for altcoins. While not yet a full-blown altcoin season, this upward trend is certainly catching the attention of astute investors.

Decoding the Index: When Does Altcoin Season Begin?

Understanding the score of the Altcoin Season Index is key to grasping prevailing market trends. A score closer to 100 indicates a strong altcoin season, where a significant portion of the market’s capital flows into alternative cryptocurrencies.Specifically, an altcoin season is officially declared when a staggering 75% of these top 100 altcoins have outperformed Bitcoin over the preceding 90-day period. This threshold signifies a broad-based rally across the altcoin market.

Conversely, if Bitcoin is the dominant performer, we find ourselves in a ‘Bitcoin season’. During such times, Bitcoin typically consolidates its position, often drawing capital away from altcoins. The current movement of the Altcoin Season Index at 56 shows a compelling shift towards altcoin strength, indicating that more altcoins are beginning to outshine Bitcoin.

Why Does the Altcoin Season Index Matter for Your Portfolio?

For investors, the Altcoin Season Index offers invaluable insights into potential market rotations. Recognizing the signs of an impending altcoin season can present significant opportunities for portfolio growth and strategic adjustments. During these periods, many altcoins can experience rapid price appreciation, often outpacing Bitcoin’s gains.

● Strategic Allocation: It helps investors decide whether to increase their exposure to altcoins or prioritize Bitcoin, optimizing their portfolio for current market conditions.

● Risk Management: Understanding the prevailing market sentiment can aid in managing risk, as different assets perform better in varying market conditions.

● Profit Potential: Identifying early signs of an altcoin season can lead to substantial profits from well-chosen altcoins that capitalize on the market’s momentum.

Paying attention to the Altcoin Season Index can empower you to make more informed decisions rather than simply reacting to price movements.

Navigating the Challenges and Opportunities with the Altcoin Season Index

While an increasing Altcoin Season Index is exciting, it’s crucial to approach the market with a balanced perspective. The crypto market is known for its volatility, and altcoin rallies can be particularly intense, both upwards and downwards. This dynamic environment presents both significant challenges and immense opportunities.

One challenge is the sheer number of altcoins available. Deciding which ones have genuine potential amidst the hype requires thorough research and a deep understanding of their underlying technology and use cases. Another is the risk of ‘altcoin busts,’ where speculative bubbles can form and burst quickly, leading to substantial losses for unprepared investors. Always do your diligent research before committing capital.

However, the opportunities are immense for those who are well-informed. Emerging technologies, innovative use cases, and strong community support can drive certain altcoins to new heights. The current movement of the Altcoin Season Index might indicate that more capital is flowing into these alternative assets, seeking higher returns and innovative projects beyond Bitcoin.

What’s Next for the Altcoin Season Index? Actionable Insights

The current trajectory of the Altcoin Season Index at 56 indicates a cautious optimism. It’s not a full sprint into an altcoin season yet, but it’s certainly more than a jog. This suggests a period where selective altcoins could see significant gains. What should investors consider doing now to best position themselves?

● Monitor Closely: Keep a keen eye on the index’s movements and the individual performance of top altcoins. Daily changes can offer valuable clues.

● Diversify Smartly: Consider diversifying your portfolio with promising altcoins, but avoid over-concentration in highly speculative assets. A balanced approach is key.

● Research Diligently: Focus on projects with strong fundamentals, clear roadmaps, active development teams, and real-world utility.

● Stay Informed: Follow market news, expert analyses, and community sentiment to make well-informed decisions. The crypto landscape evolves rapidly.

The recent surge of the Altcoin Season Index to 56 is a compelling indicator of shifting tides in the cryptocurrency landscape. While not a definitive altcoin season yet, this upward movement suggests that altcoins are gaining strength against Bitcoin. By understanding what the index signifies, its calculation, and how to interpret its movements, investors can better position themselves to capitalize on potential opportunities. Always remember to conduct your own research and manage risks wisely in this dynamic market. The stage is set for an exciting period; are you ready to navigate it?

Frequently Asked Questions (FAQs)

1. What does the Altcoin Season Index measure?

The Altcoin Season Index measures the performance of the top 100 cryptocurrencies (excluding stablecoins and wrapped tokens) against Bitcoin over the past 90 days. It indicates whether altcoins are generally outperforming Bitcoin or vice versa.

2. How is an altcoin season officially declared?

An altcoin season is officially declared when 75% of the top 100 altcoins (excluding stablecoins and wrapped tokens) have outperformed Bitcoin over the preceding 90 days. A score closer to 100 on the index signals a strong altcoin season.

3. Why did the Altcoin Season Index rise to 56?

The Altcoin Season Index rose to 56 because a greater number of the top 100 altcoins have started to outperform Bitcoin over the last 90 days, indicating a shift in market momentum and increased interest in alternative cryptocurrencies.

4. What’s the difference between an altcoin season and a Bitcoin season?

An altcoin season occurs when altcoins broadly outperform Bitcoin, typically indicated by a high Altcoin Season Index score. A Bitcoin season, conversely, is when Bitcoin is the dominant performer, often attracting capital from altcoins and showing a lower index score.

5. How can I use the Altcoin Season Index in my investment strategy?

You can use the Altcoin Season Index as a guide for portfolio allocation. A rising index might suggest increasing exposure to well-researched altcoins, while a falling index could indicate a preference for Bitcoin or more cautious investing. Always combine this with your own due diligence.

6. Is a score of 56 on the Altcoin Season Index a guarantee of an altcoin rally?

No, a score of 56 on the Altcoin Season Index is not a guarantee of an immediate, full-blown altcoin rally. While it indicates growing momentum and a positive trend for altcoins, it is still below the 75% threshold for an official altcoin season. It suggests a potential shift, but market conditions can change rapidly.

Source: CryptoSlate

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Blue River

Technical Analysis

USDJPY regained traction on Wednesday, after spiking to the lowest in nearly one month on Tuesday.

Strong downside rejection formed a bear trap pattern (under daily cloud base), as well as Hammer candle (Tuesday), adding to developing positive signals.

Strong resistances at 147.60 zone (daily cloud top / converged 10/20 DMA’s) are under pressure, with sustained break here to strengthen near-term structure for fresh recovery towards targets at 148.05/46 (Fibo) and key barrier at 148.70 (200DMA).

Bullish near-term bias expected while the price holds above 55DMA (147.18), but caution is required as daily studies are bearishly aligned (daily RSI below 50 / 14-d momentum in negative territory).

Thursday’s release of US August inflation report will be in focus for the final signals ahead of FOMC policy meeting next week.

Res: 147.72; 148.05 148.46; 148.70.Sup: 147.39; 147.18;146.70; 146.30.

Source: ACTIONFOREX

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Warren Takunda

Stocks

London stocks were still higher by midday on Wednesday as investors eyed the latest US inflation reading, but Primark owner AB Foods slumped after a trading update.

The FTSE 100 was up 0.3% at 9,273.86.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "The Footsie is edging higher in early trade, taking a cue from an upbeat Wall Street and a positive session for indices in Asia. Geopolitical tensions are pushing up oil prices amid spreading supply concerns. Despite weakening global growth prospects, optimism is still swirling given that an interest rate cut from the US Federal Reserve looks firmly on the cards this month.

"Sentiment could turn sour if today’s inflation snapshot comes in higher than expected. The headline rate is expected to come in at 2.9% but the real number to watch will be core CPI, which strips out volatile food and fuel prices. It’s broadly expected to be stable, coming in at 3.1% on an annual basis, but if it ticks higher month to month, it could put the cat among the pigeons. A sign that elevated inflation isn’t just stubborn but heading higher, could dent hopes for a succession of cuts to come. It’s unlikely to push the Fed off course this month, but the ‘dot plot’ path of cuts ahead may look shakier."

The US producer price index for August is due at 1330 BST.

In equity markets, DCC shot to the top of the FTSE 100 after saying it plans to launch a £600m return to shareholders, having completed the sale of its healthcare business.

GSK's consumer spinoff Haleon rallied after Goldman Sachs upgraded the shares to ‘buy’ from ‘neutral’ and lifted the price target to 440p from 415p.

"Haleon shares have declined 9% since post its Capital Markets Day on May 1st which provides a buying opportunity, in our view, given that H2 25 headwinds from the US and FX/scope are reflected in consensus, while the attractive fundamentals remain intact," Goldman said.

On the downside, Associated British Foods tumbled after a trading update.

Richard Hunter, head of markets at Interactive Investor, said: "AB Foods is finding the current environment heavy going, with the Sugar business still leaving anything but a sweet taste in the mouth for investors.

"The Sugar division accounts for around 11% of group sales, where lower European sugar and higher beet prices, along with a loss at its UK bioethanol business, Vivergo, are still expected to cause an annual loss of £40 million for the unit versus previous estimates of profit up to £75 million.

"Sales overall are expected to show a decline of 10%, as a result of which the group has decided to close its Vivergo plant and restructure its Spanish sugar business, which will result in impairment charges of around £200 million.

"The second largest unit is Grocery, which accounts for 22% of group sales, and trading is expected to be in line with the previous year. Strong showings from Ovaltine and Twinings have helped cushion the blow, while the announcement of the Hovis acquisition should result in financial sustainability as early as next year."

He pointed out that growth at Primark - which accounts 47% of overall revenues - has been hard to come by and has come up against some tough comparatives from the prior year.

"In addition, cautious consumer sentiment is already beginning to weigh on prospects, as had largely been predicted following the measures announced in the Budget which were seen as being particularly harmful to the retail sector," he said.

Housebuilder Vistry fell as it posted a 33% drop in interim earnings but held full-year guidance, saying it expects to deliver a year-on-year increase in profits despite an uncertain economic environment.