Understanding Candlestick Charts [Full Guide]

Economic

Summary:

Unveil the secrets of candlestick charting: a guide to decoding market emotions and predicting movements with historical and practical insights in trading.

The candlestick charting technique was developed in the 18th century by a Japanese rice trader named Munehisa Homma. It was later popularized in the Western world by Steve Nison, who recognized its analytical value in trading. Candlestick charts are a fascinating and dynamic way of visualizing price movements in the stock market, commodities, or cryptocurrencies.

What is a Candlestick Chart?

Imagine you're looking at a storybook, where each page tells you a story of a day in the market. Instead of words, the story is told through a unique symbol known as a "candlestick." This isn't your regular candle, but a graphical representation that shows the opening price, closing price, high, and low of an asset for a particular period.

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A candlestick has three main parts:

Body: The wide part of the candlestick shows the opening and closing prices. If the body is filled or dark, it means the asset closed lower than it opened (bearish). If it's empty or light-colored, the asset closed higher than it opened (bullish).

Wick/Shadows: These are the thin lines above and below the body, representing the high and low prices during the period.

Color: Often, candlesticks are colored to make it easy to distinguish between bullish and bearish periods. Commonly, green or white is used for periods when the price has increased, while red or black indicates a decrease.

How to Read a Candlestick Chart?

Reading a candlestick chart is like reading a map. Each candlestick provides a story about the price action of the asset. Here's how to interpret the information:

Observe the Body: The size of the body can tell you about the market's volatility. A long body signifies strong buying or selling pressure, while a short body indicates little price movement and consolidation.

Look at the Wicks: Wicks can show the volatility during the period and how prices were rejected or accepted above and below the body.

Color Matters: The color gives you immediate insight into the market dynamics - a green/white candle indicates buying pressure, while a red/black candle shows selling pressure.

Pattern Recognition: Identifying patterns can help predict future market movements. It’s like putting together pieces of a puzzle.

Single Candlestick Patterns

Understanding single candlestick patterns is crucial for traders and investors who use technical analysis to make informed decisions. Each candlestick provides insights into market sentiment and potential price movements within a specific timeframe. Here’s a detailed explanation of key single candlestick patterns:

1. Long Upper Shadow

Features: This pattern has a small body at the lower end of the trading range, with a long upper wick extending from the top of the body.

Interpretation: It indicates that during the session, buyers pushed the prices up, but couldn't sustain the higher levels, leading to a significant sell-off. Although not always bearish, it suggests that there is considerable selling pressure at higher price levels, which could signal a potential bearish reversal or top formation.

2. Long Lower Shadow

Features: This candlestick shows a small body at the upper end, with a long lower wick.

Interpretation: It signifies that the prices were driven down by sellers, but buyers managed to push the prices back up, closing near the open. This pattern is often bullish, suggesting strong buying interest at lower prices, and could indicate a potential bullish reversal or support level.

3. Doji

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Features: The Doji is characterized by a virtually nonexistent body, with the opening and closing prices almost identical, flanked by varying lengths of wicks.

Interpretation: This pattern reflects market indecision, where neither buyers nor sellers have control. It's a signal that a reversal could be imminent, especially after a strong uptrend or downtrend.

4. Red Candle (Bearish)

Features: A red candle has a body that is filled or colored, indicating that the closing price is lower than the opening price.

Interpretation: It signifies bearish sentiment, showing that sellers dominated the session. The larger the body, the more intense the selling pressure.

5. Green Candle (Bullish)

Features: A green candle, often hollow or unfilled, indicates that the closing price is higher than the opening price.

Interpretation: This pattern denotes bullish sentiment, with buyers in control, pushing the prices higher throughout the session. The size of the body can indicate the strength of the buying pressure.

6. Hammer

Features: The Hammer has a small body at the top with a long lower shadow and little or no upper shadow.

Interpretation: Typically found at the bottom of a downtrend, it signifies that although there was selling pressure during the session, ultimately, strong buying pressure drove the prices back up. This is considered a bullish reversal signal.

7. Hanging Man

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Features: Identical in appearance to the Hammer, but occurs after an uptrend.

Interpretation: It suggests that despite buying pressure, sellers managed to push the price down significantly before it closed near the open. This pattern can signal a bearish reversal.

8. Inverted Hammer

Features: This candlestick has a small body at the lower end, with a long upper shadow and a short or non-existent lower shadow.

Interpretation: Appearing at the end of a downtrend, it suggests that buyers attempted to bid the prices higher, but selling pressure ultimately pushed the prices back down. However, the high closing indicates that buyers are regaining control, hinting at a potential bullish reversal.

9. Shooting Star

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Features: It appears as a mirror image of the Inverted Hammer but occurs during an uptrend.

Interpretation: The pattern indicates that buyers pushed the prices up, but sellers took over and pushed them back down, closing the session near its opening. This can be a warning of a potential bearish reversal.

Understanding these candlestick patterns can significantly enhance your market analysis and help in making informed trading decisions. Remember, while these patterns are helpful, they should ideally be used in conjunction with other forms of analysis to validate the trading signals they provide.

Popular Candlestick Pattern

Hikkake pattern

This deceptively bullish pattern opens with a strong green candle, followed by a large red candle that engulfs the prior body. The Hikkake presents a potential bull trap, alluring buyers before a price reversal.

Hogscraper candlestick

Characterized by a solitary candlestick with a minuscule body and substantial upper and lower wicks, the Hogscraper signifies market indecision. Prices explore a wide range within the timeframe, offering little directional guidance.

Morning star

A beacon of hope in a downtrend, the Morning Star comprises three candlesticks. The first, a large red body, establishes the downtrend. The second, ideally a Doji or Hammer, indicates a pause in the decline. Finally, a green candle closing above the second candlestick's high signals a potential trend reversal.

Seven-branched Candelabrum (Essen)

A rare but potent bullish reversal pattern, the Essen consists of seven consecutive candles, each closing progressively higher than the one before. This sequential advance suggests significant buying pressure and a potential for substantial price appreciation.

Three black crows

The bearish counterpart to the Three White Soldiers, this pattern features three consecutive red candles with long bodies and minimal wicks. The Three Black Crows signify strong selling pressure, potentially foreshadowing a price decline.

Three white soldiers

The bullish counterpart to the Three Black Crows, this pattern features three consecutive green candles with long bodies and minimal wicks. The Three White Soldiers suggest strong buying pressure and a potential continuation or initiation of an uptrend.

Maximizing Candlestick Trading with Key Technical Indicators

Several indicators can significantly enhance the analysis of candlestick patterns by providing additional layers of information about market conditions, trends, volatility, and momentum. These indicators, when used alongside candlestick analysis, can help traders make more informed decisions by confirming patterns or highlighting divergences. Here are various types categorized by their primary function:

Trend Indicators

Moving Average (MA)

Moving Average Convergence Divergence (MACD)

Parabolic SAR

Ichimoku Cloud

Momentum Indicators

Relative Strength Index (RSI)

Stochastic Oscillator

Commodity Channel Index (CCI)

Volume Indicators

Volume

On-Balance Volume (OBV)

Chaikin Money Flow (CMF)

Volatility Indicators

Bollinger Bands

Average True Range (ATR)

Keltner Channels

Market Strength Indicators

Accumulation/Distribution Line

Money Flow Index (MFI)

These indicators, when used in conjunction with candlestick patterns, can provide a multifaceted analysis of the market, allowing traders to assess not just price action but also momentum, trend strength, volatility, and market sentiment. This comprehensive approach can significantly enhance trading strategies and decision-making processes.

Conclusion

Candlestick charts are not just visually appealing but also incredibly informative. They offer a deeper insight into market sentiment than traditional line charts. By understanding the basics of how to read these charts and recognizing simple patterns, even beginners can start to interpret market trends and make informed decisions. Remember, like any skill, practice is key to becoming proficient, so keep exploring and practicing reading these fascinating charts!

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

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Kevin Du

The UAE is a key digital economy partner for Latin America, according to industry leaders speaking at the fourth edition of the Global Business Forum Latin America (GBF LATAM 2022) in Dubai.

The UAE has created a stimulating environment for the growth and development of digital companies, and the Latin American markets are rich in human expertise and competencies specialised in digital transformation.

A panel session at the forum entitled Empower – Fostering A Digital Economy was joined by Min Chen, co-founder and Chief Executive Officer of Wisy, Panama's first unicorn startup based in San Francisco, and Alaa El Huni Head of Partnerships and Expansion at Cafu in UAE, on the importance of the digital economy in supporting economic growth.

Alaa Al-Houni stressed that Dubai in particular, and the UAE in general, provides a nurturing environment for the development and growth of technology sector companies, due to its strong digital infrastructure and comprehensive digital services – attributes that push companies to move forward in the field of the digital economy and design more innovations and important services that support digital communities.

Al-Houni explained that investing in human capital is one of the most important elements that have been benefited from the Latin American markets. He said that since its establishment three years ago in the UAE, his company Cafu has attracted skills from across the Latin region, which has had an effective role in the growth of the company's business

He noted that investment in human resources in the digital economy is more important than investing in capital, with the Covid-19 pandemic having accelerated the process of introducing distinguished talents, whether from the UAE or from around the world, which has enabled the UAE to become a regional hub for talents.

Min Chen pointed to the role of the regulatory environment in developing the digital economy sector, and said that advanced systems can empower companies in the field of information technology and push them to make significant strides forward.

She explained that to benefit from Dubai's successful experience in the field of regulatory environment for the digital economy sector, Latin American countries need to put in place policies that facilitate the start-up of businesses and companies in the field of technology, as well as provide the flexibility to employ innovators who are not citizens. Chen concluded that the world today has become more interconnected thanks to technology, which requires Latin American countries to be more open to the world.

Source:ITP

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Owen Li

Europe's economic recovery slowed in the first weeks of March after Russia's invasion of Ukraine disrupted supply chains, weakened confidence and sent raw-material and energy prices soaring, business surveys showed.

The lifting of pandemic restrictions on Europe's services sector is softening the blow for now but as this positive effect fades, economists expect the war to take a heavier toll on growth as higher energy costs push consumer prices up.

Data firm S&P Global Thursday said its composite Purchasing Managers Index for the eurozone—a measure of activity in the manufacturing and services sectors—fell to 54.5 in March from 55.5 in February. This was a smaller fall than predicted by economists surveyed by The Wall Street Journal last week. A reading above 50.0 points to an increase in activity.

Many European countries rely heavily on Russia for energy supplies, including oil and natural gas that is transported through pipelines. Energy prices had been rising in the months leading up to Russia's invasion of its neighbor on Feb. 24, and have continued to increase since then on worries that supplies will be interrupted over coming months.

As a result, eurozone businesses reported the sharpest rise in costs since the survey began to collect records in 1998. The subindex that measures costs rose to 81.6 in March from 74.8 in February, well above the previous record high of 76.0 in November 2021. In response, businesses raised their own prices.

"The war has aggravated existing pandemic-related price pressures, which will inevitably feed through to higher consumer prices in the months ahead," said Chris Williamson, chief business economist at S&P Global.

The invasion also dealt a blow to eurozone consumer confidence, according to a survey released by the European Commission Wednesday. The monthly poll recorded weaker sentiment in early March comparable to that seen when the pandemic struck in early 2020.

S&P Global said Europe's automobile makers were among the hardest hit businesses in the early weeks of the invasion. The conflict caused shortages of some parts that are made in Ukraine, leading to the suspension of output at some factories across Europe. However, those supply blockages appear to be easing.

"Due to the short-term improvement in the supply situation for components, Volkswagen Sachsen can ramp up production at the Zwickau & Dresden plants next week faster than planned," said a spokesperson for Volkswagen AG , the German car maker. The Zwickau site is the company's main electric-vehicle factory in Europe.

The European Central Bank has already lowered its forecast for economic growth in the eurozone this year to 3.7% from 4.2%, assuming that disruptions to energy supplies and confidence prove temporary and that global supply chains aren't significantly affected.

The bank said that the damage inflicted by Russia's invasion could be larger. Cuts in Russian supplies of natural gas could cause growth to slow down to between 2.5% and 2.3%, it said.

Earlier this month, the central bank said it would reduce its purchases of government bonds over the coming three months, and may end them entirely by September to contain a pickup in the annual rate of inflation, which stood at 5.9% in February. Policy makers have stressed they will be flexible in their response to economic developments over coming months, rather than stick to a predetermined path.

"The current exceptional uncertainty means that we need to be humble about how accurately we can predict the future state of the economy," said Frank Elderson, an ECB rate-setter, in a speech Thursday.

Source: The Wall Street Journal.

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Damon

From Mar. 31, firms operating crypto services in Britain must be registered with the Financial Conduct Authority, which is tasked with overseeing how digital asset firms combat money laundering.

Last year, the regulator extended the deadline allowing firms on a temporary register to continue trading while they sought full authorization — it'll close once the deadline passes. The FCA said many crypto companies had withdrawn their applications as they were not meeting the required anti-money laundering standards.

Now, with just days to go until the new deadline elapses, the fate of firms on the temporary register — including $33 billion fintech firm Revolut and Copper, a crypto start-up that counts former U.K. Finance Minister Philip Hammond as an advisor — hangs in the balance.

'A total disaster'

Many industry insiders have expressed frustration with the FCA's handling of the crypto register.

One lawyer advising crypto companies on their applications said the regulator had been slow to approve applications and was often unresponsive, a sentiment echoed by other figures in the sector.

"The process has been a total disaster from the FCA's side of things," the lawyer told CNBC, speaking on the condition of anonymity due to the sensitive nature of the matter.

An FCA spokesperson said it has approved just 33 crypto firms' applications so far. More than 80% of the firms it has assessed to date have either withdrawn their applications or been rejected.

"We've seen a high number of the cryptoasset businesses applying for registration not meeting standards there to help ensure firms are not used to transfer and or disguise criminal funds," the spokesperson said.

"Firms that do not meet the expected benchmark can withdraw their application. Firms that decide not to withdraw have the right to appeal our decision to refuse, including through the courts."

Why it matters

Gemini, the crypto exchange operated by Tyler and Cameron Winklevoss, was among the first firms to get approved by the FCA.

Blair Halliday, Gemini's head of U.K., said the licensing regime is important as it provides customers the assurance that they're dealing with a firm that has undergone rigorous scrutiny.

"Getting a crypto asset registration in place was a critical step for crypto in this country," Halliday told CNBC. "It gave firms that really have that desire to seek regulatory approvals something to demonstrate as a key differentiator."

Crypto industry association Global Digital Finance's Lavan Thasarathakumar said there has been "a lot of frustration" over the process.

"Fundamentally, it has been too slow," Thasarathakumar said, adding that the FCA has been dealing with a "huge backlog" of applications for the register.

And some companies are still withdrawing their applications.

That includes B2C2, the London-based crypto trading firm, which recently withdrew from the FCA's temporary register. Since Monday, all of B2C2's spot trading activity has shifted to the company's U.S. entity. The firm said its derivatives business is unaffected as it is handled by an FCA-authorized subsidiary.

"We are committed to ensuring this move causes as little disruption as possible and are working closely with our clients to ensure they continue to have a seamless trading experience with us," a B2C2 spokeswoman told CNBC via Telegram.

Firms that have had their applications rejected by the FCA can appeal, but the process is a long one and could need to go through the courts.

A tribunal recently sided with the FCA's decision to refuse an application from the crypto exchange Gidiplus.

Brexit dividend?

Mauricio Magaldi, global strategy director for crypto at the fintech consultancy 11:FS, said the current regulatory direction of the U.K. puts the country at risk of falling behind the U.S., European Union and other regions.

President Joe Biden has signed an executive order calling for coordination from the government on oversight of digital currencies, while EU lawmakers recently voted down a proposal that would have effectively banned bitcoin mining in the bloc.

"While major jurisdictions are spotting the opportunity and the risk, the U.K. is emphasising the risk," Magaldi told CNBC. "By moving too fast and too narrow, rules and timeframes create hurdles to crypto firms that could potentially displace them from the U.K. market."

Industry representatives fear this could put the U.K. at a disadvantage at a time when it is vying to be a global leader in financial innovation post-Brexit. The country is home to a thriving fintech industry, attracting nearly $12 billion in investment last year.

But fast-growing fintechs like Revolut and Copper may soon be forced to wind down their crypto activities in Britain and move offshore if they don't make it onto the full register. Both companies declined to comment when contacted by CNBC.

Firms like PayPal and Coinbase, which sell crypto services in the U.K. through overseas subsidiaries, will be unaffected.

Source：CNBC

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Damon

Central Bank

Swiss National Bank Sticks to Loose Policy Despite Inflation Pickup_1

The SNB is bucking the trend as other central banks hike interest rates to tackle surging inflation, such as in the United States and Britain.

Instead it kept its policy rates locked down at -0.75%, as unanimously forecast by economists in a Reuters poll, as well as its commitment to conduct currency interventions to stem the rise of the safe-haven Swiss franc.

The central bank also kept its description of the franc as "highly valued", the same wording it has deployed since September 2017, despite the currency recently hitting its highest level against the euro in seven years.

The SNB said Russia's invasion of Ukraine has led to a "strong increase in uncertainty worldwide", traditionally seen as a trigger for safe-haven flows into the currency, driving it its value briefly above parity against the euro this month.

On Thursday, the SNB said it took the overall currency situation and the inflation rate differential with other countries into consideration, leading analysts to comment that the central bank seemed relatively relaxed about the recent rise in the currency's value.

While the franc has since depreciated, Swiss inflation has continued to rise, hitting 2.2% in February - above the SNB's 0-2% target and its highest level since 2008.

The SNB said the Ukraine conflict would lead to higher prices, raising its inflation forecasts due to rising oil prices and supply bottlenecks.

It doubled its inflation outlook for 2022, now expecting Swiss inflation of 2.1% for the year overall. It also raised its forecast to 0.9% for 2023 from 0.6% previously and expects inflation at 0.9% in 2024.

The SNB also downgraded its economic forecasts.

But despite rising prices, the SNB decided not to follow the example of the U.S. Federal Reserve and the Bank of England, which both raised rates last week.

Still, despite it sticking to the policy script it has repeated since 2015, analysts detected the first signs of a shift in tone.

"While today's decision by the SNB to leave its policy rate on hold at -0.75% was never in doubt, it raised its conditional inflation forecast, and the end of its prolonged period of policy stasis is drawing closer," said David Oxley at Capital Economics.

"We expect it to take the cover afforded by the more hawkish global backdrop and ECB and raise rates back to zero by the end of 2023."

Maxime Botteron, an economist at Credit Suisse, said that for the first time in a very long time the SNB had acknowledged that inflation could accelerate.

"In our view, this is a small step towards a slightly more hawkish tone," he said. "Once, or if, the uncertainty related to the war in Ukraine diminishes, the SNB may well adopt a less dovish tone.

"This could translate into a long-term inflation forecast above 2% and a reassessment of the valuation of the franc. We continue to expect a first rate hike in June 2023."

Source：REUTERS

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Damon

2022 Off to a Slow Start Thanks to Supply Setbacks

New home sales fell 2.0% in February to a 772,000 unit pace. The decline follows an 8.4% pullback in February.

The major issues holding back home sales are on the supply side. Building material and labor shortages have led to uncertain completion times, which have forced most builders to limit sales to allow projects to catch up.

Despite the drop in overall sales, sales of new homes which have not been started rose to 209,000 units during the month, reflecting a growing backlog for builders.

The number of homes for sale rose to 407,000 in February from 398,000 the month prior. However, almost all of that increase occurred in homes which have yet to start construction.

The lack of supply, as well as rising building material and labor costs, are pushing up the price of a new home. The median price of a new home was $400,600 in February, up 10.7% over the past year.

Sales in the West slipped 13.0%, while sales in the South edged down 1.7%. Meanwhile, sales in the Northeast and Midwest rose 59.3% and 6.3%, respectively.

Higher borrowing costs are sure to test home sales in coming months. According to Freddie Mac, average 30-year mortgage rates rose above 4% for the first time since May 2019 during the week of March 17th. More recently, rates have spiked even higher, with daily rates reaching 4.72% on March 22nd, according to Mortgage News Daily.

Higher mortgage rates are likely to continue to create a sense of urgency for prospective buyers in the near term, which could support sales in the months ahead. After slipping in February, mortgage applications for purchase have picked back up in March.

If mortgage rates continue to climb, however, the steady erosion of affordability will surely weigh on home sales longer-term. While the pace will likely slow a bit, sales should hold up reasonably well thanks to pent-up demand and the continuing wave of Millennial buyers.

New Home Sales Falter So Far in 2022

New home sales fell 2.0% in February to a 772,000 unit pace. The decline follows an 8.4% pullback in the first month of the year. Despite the current headlines surrounding rising mortgage rates, the major issues holding back home sales so far this year continue to be on the supply side. While there have been some signs of easing, the supply chain disruptions which have fueled shortages of a wide variety of building materials continue to cause delays, increasing the time it takes to complete a new home. Uncertainty in regards to completion times have forced many builders to limit sales to allow projects to catch up, much to the dismay of prospective buyers who remain eager to purchase almost any home that is available. Despite the drop in overall sales, sales for new homes not started rose to 209,000 units during the month.

In terms of new home supply, there have been some modest improvements over the past few months. The number of homes for sale rose to 407,000 in February from 398,000 the month prior. Almost all of that increase, however, occurred with homes where construction has not yet start. The general dearth of supply, as well as rising building material and labor costs, are pushing up the price of a new home. The median price of a new home was $400,600 in February, up 10.7% over the past year, or $38,600 more than a year ago.

Regionally, sales fell in the West and South, the two largest home building regions. For perspective, the South accounted for roughly 58% of new home sales this past year, while the West accounted for 25%. Sales in the West fell 13.0% in February, while sales in the South edged down 1.7%. Meanwhile, the Northeast and Midwest rose 59.3% and 6.3%, respectively.

The total decline in new home sales was presaged by a pullback in mortgage applications during February. The good news is that mortgage applications for purchase rebounded in early March as the spring selling season gets underway. The MBA purchase application index rose in the first two weeks of March, although it declined slightly in the week ending March 18th. Rising mortgage rates are likely encouraging many prospective buyers to try and keep a step ahead of the curve and pull forward a purchase they might have waited a few months to do. March's upturn in mortgage applications for purchase is also sign that buyers are not yet having any major problems digesting higher borrowing costs.

Looking ahead, sharply higher mortgage rates are certain to test home sales in coming months. According to Freddie Mac, average 30-year mortgage rates rose above 4% for the first time since May 2019 during the week of March 17th. More recently, rates have spiked even higher, with daily rates reaching 4.72% on March 22nd, according to Mortgage News Daily. The acceleration follows the FOMC lifting the effective federal funds target range by 25 basis points this past week. Furthermore, the Fed has now concluded its tapering of asset purchases and will soon begin to reduce balance sheet, which includes agency mortgage-backed securities.

In recent days, Fed officials have become even more hawkish in their commitment to tamp down inflation, which was running at a 40-year-high, even before the recent surge in energy prices following Russia's invasion of Ukraine. The recent sharp acceleration in the 10-year Treasury yield, and thus mortgage rates, is somewhat reminiscent of 2013's taper tantrum and 1994's jump in rates, both of which occurred as the Fed moved to tighten monetary policy. The taper tantrum set off a wave of contract cancelations and dealt a blow to the housing recovery a decade ago.

Higher mortgage rates are likely to continue to create a sense of urgency for prospective buyers, which could support sales in the months ahead. If mortgage rates spike further, however, the steady erosion of affordability will surely weigh on home sales. In recent earnings reports, some public builders have communicated they are already seeing a higher rate of cancellations due to rising borrowing costs, although the cancellation rate is still well below prior norms. The difficulty in finding a new home likely makes buyers more reluctant to cancel today. Still, the increase in cancellations is a reminder that higher mortgage rates, double-digit price appreciation and record low inventories are powerful headwinds which could soon push back against the strong tailwinds of favorable demographics, tight labor markets and savings built up during the pandemic.

Source：WELLS FARGO

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Devin

European economies face the risk of a shortage of diesel, the preferred fuel for heavy industry, as sanctions on Russian energy threaten to disrupt imports while supply from elsewhere remains limited.

Russia is Europe's largest supplier of diesel and related fuels, sending over three quarters of a million barrels per day for use in European heavy machinery, transportation, farming, fishing and for power and heating.

The surge in diesel prices in Europe has already had an impact on industry by pushing up fuel and transportation costs, which are passed on to consumers through higher costs across the economy.

"Governments have a very clear understanding that there is a clear link between diesel and GDP, because almost everything that goes into and out of a factory goes using diesel," John Cooper director general of Fuels Europe, a division of the European Petroleum Refiners Association.

The United States has banned Russian oil imports in response to Russia's invasion of Ukraine, Britain said it will phase out the import of Russian oil and oil products by the end of 2022, and the European Union is assessing a ban.

Meanwhile, several oil companies have pulled back from buying from Russia because of a fear of public opposition, difficulties in securing financing, insurance and a reluctance of ship owners to load from Russian ports.

Around 760,000 barrels per day of Russian gasoil and diesel flows to Europe would be at risk, needing replacement, if European buyers shun these volumes, according to energy consultancy FGE.

It will be difficult for European refiners to increase output of middle distillates, which include diesel and heating oil, Cooper said, so Europe should find other sources of diesel, probably at higher prices. MOST EXPOSED COUNTRIES Russia accounts for around half of Europe's diesel imports, Russell Hardy and Torbjorn Tornqvist, chief executives of Vitol and Gunvor respectively, told the FT Commodities Global Summit on Tuesday.

Saudi Arabia, the second biggest supplier, accounted for only 12% of the imports in 2021, according to FGE.

France imported 25 million tonnes of diesel in 2020, a quarter of which was Russian, according to the French Association of Petroleum Industry (UFIP).

And France may struggle to find alternative supplies. "We estimate that 10 to 15% can be found elsewhere," Olivier Gantois, the head of UFIP, said this month.

In the United Kingdom, Russia supplied 18% of the diesel in 2020, official figures show.

A spokesperson for UK Petroleum Industry Association (UKPIA) told Reuters fuel suppliers are working with the government to deliver the fuels the UK needs "while adjusting long-term supply routes to reduce reliance on Russian crude oil and oil products".

For Germany the situation seems to be more complicated as it has fewer options to reduce its deep reliance on Russian diesel, according to trading sources.

Germany relied on Russia for almost 30% of its diesel and gasoil imports in 2020, data from the EU statistics agency show.

Despite the decision by several companies to self sanction, the flow of Russian refined products continues into Germany, according to trading and industrial sources, and it is expected to stay the same in the absence of alternative supplies.

"There just isn't enough diesel around not to take [Russian diesel] at the moment," a trading source said.

"We see some people prefer non-Russian oil, but if there is no alternative, then they will take it," the source added.

GLOBAL DIESEL SHORTAGE

Global stocks of diesel and other middle distillates have fallen to the lowest seasonal level since 2008 due to refinery shutdowns during the start of the pandemic and a rise in demand since.

Unlike Europe, which is short of diesel, the Middle East usually has a surplus due to higher refinery runs, with yields largely in favour of diesel.

The net surplus is expected to surge to 1.33 million bpd this year, according to FGE. However, not all Middle Eastern products meet the low pollution standards required in European markets. Middle Eastern producers export their products worldwide.

A more likely source of replacement barrels for Europe is the United States, which will have a net surplus of 1.1 million bpd this year, according to FGE.

But increasing flows to Europe from the Middle East and the United States will take time, one trader said, adding that for this reason "for now things will have to stay the same".

Furthermore, increased diesel trade flows between the United States and Europe could have knock-on effects elsewhere.

As European countries have more cash at their disposal, they could outbid Latin American countries, creating a shortage in Latin America, FGE analysts said.

"The diesel market is extremely tight and we're possibly heading to stock outs. Europe can probably afford to pay. The problem is what happens to Africa and Latin America," Trafigura CEO Jeremy Weir said on Tuesday.

"We're very concerned about the stock outs due to take place in Africa that heavily rely on diesel for power generation," Weir added.

HIGH PRICES

The high diesel prices could also reduce demand among private car owners who account for consumption of 1 million bpd in Europe.

"Average diesel prices at the pumps in Europe are now more expensive than gasoline. This is the first time in history. If the prices go higher, it could force private diesel car owners to reduce driving," said Cuneyt Kazokoglu, head of oil demand analysis at FGE.

With supply restricted, the price is rallying to a point that reduces demand, although predicting these heights remain unclear, analysts said.

Yet signs of demand destruction are already emerging.

"The price of fuel is extremely volatile at the moment and for some fishing vessels it is approaching the tipping point where it is not viable to embark on a fishing trip," Barrie Deas, CEO of the UK's National Federation of Fishermen's Organisations, told Reuters.

Higher fuel costs are also adding to problems in food supply chains stemming from disruptions to Black Sea grain and fertiliser exports.

Source: Reuters

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Data

Understanding Candlestick Charts [Full Guide]

What is a Candlestick Chart?

How to Read a Candlestick Chart?

Single Candlestick Patterns

1. Long Upper Shadow

2. Long Lower Shadow

3. Doji

4. Red Candle (Bearish)

5. Green Candle (Bullish)

6. Hammer

7. Hanging Man

8. Inverted Hammer

9. Shooting Star

Popular Candlestick Pattern

Hikkake pattern

Hogscraper candlestick

Morning star

Seven-branched Candelabrum (Essen)

Three black crows

Three white soldiers

Maximizing Candlestick Trading with Key Technical Indicators

Trend Indicators

Momentum Indicators

Volume Indicators

Volatility Indicators

Market Strength Indicators

Conclusion

UAE Is Key Digital Economy Partner for Latin America

Source:ITP

Europe's Economy Slows as Russian Invasion Sends Costs Soaring

Source: The Wall Street Journal.

Crypto Firms Face Being Booted from the UK as a Key Deadline Approaches

'A total disaster'

Why it matters

Brexit dividend?

Source：CNBC

Swiss National Bank Sticks to Loose Policy Despite Inflation Pickup

Source：REUTERS

U.S. New Home Sales Dip in February

2022 Off to a Slow Start Thanks to Supply Setbacks

New Home Sales Falter So Far in 2022

Source：WELLS FARGO

Diesel Shortage in Europe Threatens to Slow Economic Growth

GLOBAL DIESEL SHORTAGE

HIGH PRICES

Risk Disclosure