The USDJPY price provided additional negative trades yesterday to touch 38.2% Fibonacci correction level for the rise measured from 148.64 to 158.87, and the price needs to confirm the continuation of the decline and achieve additional bearish correction that its next target reaches 153.75.

 

Until now, the bearish trend still suggested for the upcoming period, supported by the negative pressure formed by the EMA50, reminding you that breaching 156.45 will stop the correctional bearish scenario to push the price to return to the main bullish track again.

 

The expected trading range for today is between 154.50 support and 156.10 resistance

 

Trend forecast: Bearish

Created on January 16, 2025

• Despite the fact that the day started out rather positively for the euro, the reality is that it simply cannot hang on to gains. The Consumer Price Index had a chance of helping the euro, as it came in at 0.23% instead of 0.3%.
• The market is likely to look at this, at the very least, as a good sign or a potential cooling off of the US dollar. However, we have a keep in mind that the Federal Reserve still has a long way to go before they start loosening monetary policy, while the European Central Bank looks absolutely feckless at this point in time, and there’s almost no chance they would tighten monetary policy.

Technical Analysis

The technical analysis for this market is rather dire, and the candlestick on Wednesday will have done nothing to change that attitude. After all, the US dollar got hammered after the CPI number, but you can see that we have turned right back around to show weakness here. This is mainly due to the fact that the European Union is in a complete state of chaos as far as the economic situation is concerned. In fact, I saw something just yesterday that blew my mind. 16 years ago, the United States and the European Union were roughly the same size economies. Since then, the European Union added Croatia, which in theory is a small economic player, but it should add to the overall size of the economy. As things stand right now, the US economy is 50% bigger than Europe! This is how bad the EU economic decisions over the last several years have been, not the least of which is that they have decided they don’t need energy.

With that being the case, I do believe that the euro goes to parity, and after the price action on Wednesday, I am even more convinced of this. The question is whether or not parity will hold. I certainly think that if we get there it’s likely that we will see a significant bounce, but that is something that I would probably sell into. In fact, any time this pair bounces, it’s time to start selling again.

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Japanese Yen Technical Forecast: USD/JPY Weekly / Daily Trade Levels

• USD/JPY holds technical resistance for a fifth week – falls more than 2.3% off monthly high
• USD/JPY risk for inflection into trend support- Presidential Inauguration / BoJ rate decision on tap
• Resistance 157.89-158.45 (key), 160.40/73, 161.95- Support 155.02, 151.94-152.13 (key), 148.73-149.60

The Japanese Yen rallied more than 0.9% against the U.S. Dollar since the start of the week with USD/JPY pulling back from technical resistance on the heels of yesterday’s CPI print. Support is in view and the focus is on possible price inflection ahead- decision time for the bulls. Battle lines drawn on the USD/JPY weekly technical chart.

Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Yen setup and more. Join live on Monday’s at 8:30am EST.

Japanese Yen Price Chart – USD/JPY Weekly

 

Chart Prepared by Michael Boutros, Sr. Technical Strategist; USD/JPY on TradingView

Technical Outlook: In last month’s Japanese Yen Technical Forecast we noted that USD/JPY was, “approaching major technical resistance, and the focus is on possible inflection into this threshold. From a trading standpoint, look to reduce portions of long-exposure / raise protective stops on a test of 157.16/89- losses should be limited to 152 IF price is heading higher on this stretch with a close above this pivot zone needed to mark resumption of the September uptrend.”

USD/JPY registered an intraday high at 158.08 the following week with price holding below uptrend resistance for five consecutive weeks. Key resistance now adjusted to the April high-close / January high at 158.45/88– a breach / weekly close above this threshold is needed to mark uptrend resumption towards subsequent resistance objectives at the 1990 high / 2024 high-week close (HWC) at 160.40/74, and the 2024 swing high at 161.95– look for a larger reaction there IF reached.

Initial weekly support is now in view at the November high-close near the 155-handle. Note that basic channel support converges on this level over the next few weeks and a break below this slope is needed to suggest a more significant high was registered last week / a larger reversal is underway. Subsequent support objectives seen at the 2022 /2023 highs & the 52-week moving average at 151.95-152.13 and the 2022 high-close / 2023 HWC at 148.74-149.360– both levels of interest for possible downside exhaustion / price inflection IF reached.  

Bottom line: USD/JPY turned from long-term uptrend resistance this week with the price now approaching initial trend support. From a trading standpoint, losses should be limited to channel support IF price is heading higher on this stretch with a close above 158.88 needed to mark uptrend resumption.

Keep in mind we are heading into an extended holiday weekend with the inauguration of President Trump and the Bank of Japan (BoJ) interest rate decision on tap next week. Stay nimble here into support and watch the weekly closes for guidance. I’ll publish an updated Japanese Yen Short-term Outlook once we get further clarity on the near-term USD/JPY technical trade levels.

USD/JPY Key Economic Data Releases

 

Economic Calendar – latest economic developments and upcoming event risk.

Active Weekly Technical Charts

— Written by Michael Boutros, Sr Technical Strategist

Follow Michael on X @MBForex

 

Created on January 16, 2025

• Bulls haven’t enjoyed the recent rebound gains for long in the GBP/USD pair, which reached the resistance level of 1.2305.
• We had recommended selling the GBP/USD pair above that peak through our free direct trading signals on our website.
• Obviously, this was before it quickly returned in its broader downward path with losses to the support level of 1.2186 before settling around the level of 1.2240 at the beginning of trading on Thursday.
• Ahead of a package of important economic releases from both Britain and the United States of America, the results of which may shape the closing of trading for the currency pair this week.

US Dollar Price Affected by Inflation Figures

According to Forex trading, dollar bulls needed an inflation reading that exceeded consensus to maintain their momentum, but they received news of an unexpected slowdown in core US inflation. The US dollar had retreated after the US core consumer price index (CPI) fell to 3.2% year-on-year from 3.3% (exp: 3.3%), marking the first decline since July. Overall, US core inflation, which consists of core inflation minus rents, remains elevated but is still trending down. Also, reported was that core consumer price inflation rose to 2.9% year-on-year in December from 2.7%, which was in line with expectations and helped to bolster expectations for a rate cut in June.

Expectations for US Federal Reserve Policies

Influenced by the announcement of US inflation figures, US Treasury yields declined, stocks rose, and money market prices showed that traders had increased their bets on the next US interest rate cut by the Federal Reserve in June, with a possible second cut in the second half of 2025. Overall, the data comes amid signs that the US dollar is at a peak and is trading above its fundamental drivers. This overvalued assessment was driven by a series of US economic data that came in above consensus, which now leaves room for further upside at a particularly high level. Consequently, this makes the US dollar vulnerable to data releases that meet or fall short of expectations.

According to reliable trading platforms, the US Dollar Index – a measure of the US dollar’s strength against a basket of currencies – is now more than 25% above its 25-year average and at a level we have only seen briefly since the 1980s. According to Forex analysts at Societe Generale, the overvalued US dollar assessment seems to reflect the policies of incoming US President Donald Trump that are leading the market. Furthermore, the risk is that what he offers fails to meet expectations.

However, there is also limited scope for significant US interest rate cuts, given the strength of the US economy, suggesting that a defeat for the dollar is unlikely either.

Trading Tips:

Dear TradersUp follower, the British financial crisis will remain a negative pressure factor for investor sentiment towards the British pound in the coming period, threatening any gains against the US dollar and other major currencies.

Technical Analysis for the GPB/USD pair today:

Dear reader, according to trading on the daily chart, the general trend of the GBP/USD pair is still bearish. As mentioned before, we expected that the gains of the GBP/USD pair will remain vulnerable to a rapid collapse. Furthermore, we still prefer to sell the GBP/USD from every upward level. Currently, the closest resistance levels for the currency pair are 1.2330, 1.2420, and 1.2500, respectively. The technical indicators, the Relative Strength Index and the MACD, are still bearish.

Today, the pound will be affected by the announcement of the British economic growth reading and the industrial sector. The US dollar will be affected by the announcement of US retail sales figures, weekly jobless claims and the Philadelphia Fed manufacturing index.

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FTSE rises as the pound sinks and growth stalls

• UK GDP stalls at 0.1% vs 0.2% expected
• GBP/USD falls below 1.22
• Miners led the index higher, tracking iron ore prices higher
• FTSE breaks out of range

The FTSE 100 has risen to an over five-week high after weak GDP data sent the pound lower.

UK GDP figures showed that the UK economy grew 0.1% in November, slower than the 0.2% forecast. However, this is up slightly from the 0.1% decline in output in October and September. The data confirms that growth momentum in the UK has cooled since labour came to power and confirms the country is stuck in a stagflation trap.

Following the data, the pound has fallen back below 1.22, paring yesterday’s gains following cooler UK and US inflation data. The weaker pound, owing to the more beneficial exchange rate, helps to boost the multinationals which make up around 80% of the FTSE.

Mining stocks are leading the gains, boosted by a rebound in iron ore prices and a rally in gold following yesterday’s US inflation data, which increased hopes of a further Fed rate cut this year.

In corporate news, Antofagasta is up 2.9% after posting higher copper and gold production in Q4, while Rio shares have climbed as the company reaffirmed its outlook and announced increased copper output.

Taylor Wimpey is leading the losses, down over 3%, after reporting UK home sales near the top end of guidance, but flagged growing costs.

Looking ahead, attention will turn to US jobless claims and retail sales later today for further clues over the health of the US economy and the outlook for Fed rate cuts.

FTSE forecast – technical analysis

The FTSE 100 has traded within a holding pattern since May last year. More recently the price has extended its recovery from 8000, rising above the 200 SMA at 8225 and has broken above 8325, the level that has capped gains for much of the past 9-months.

Buyers supported by the bullish breakout and the RSI above 50 will look to extend gains towards 8400 and 8480 to fresh record highs.

Support is seen at 8325. A break below here takes the price back into the holding channel and exposes the 200 SMA at 8225. Below here, 8150 comes into focus ahead of 8000.

 

EUR/USD holds below 1.03 ahead of ECB minutes, US retail sales & jobless claims

• German CPI was revised higher to 0.5% MoM
• US retail sales are forecast to rise 0.6%
• EUR/USD remains in a downward channel

EUR/USD is holding steady below 1.03 after modest losses yesterday amid ongoing concerns surrounding the Eurozone’s economic outlook. Dovish ECB commentary reinforces the expectations of further rate cuts while the USD rises versus major peers.

The euro is finding some support from an upward revision to German inflation, which rose 0.5% MoM in December, while core CPI rose 3.3%, up from 3%.  However, the data raises stagflation concerns for the eurozone’s largest economy and reaffirms expectations of further rate cuts by the ECB.

ECB policymakers have remained dovish. This week, Finland governor Olli Rhen commented that he sees monetary policy leaving restrictive territory, most likely by midsummer. While ECB’s Philip Lane warned over keeping rates too restrictive for too long.

Attention now turns to ECB minutes, which could provide further clues about the outlook for rate cuts this year. eBay is expected to cut rates by 25 basis points at the end of this month, and three more rate cuts are expected this year.

The USD is steadying after losses versus its major peers yesterday after cooling US core inflation and falling bond yields pulled the currency lower.

US core inflation was 0.2% month on month in December down from 0.3% and annualised core inflation eased to 3.2% below the three-point 3% expected. Attention now turns to a slew of U.S. data, including jobless claims and retail sales. Solid numbers could highlight the strength of the US economy and lift the US dollar higher.

EUR/USD forecast – technical analysis

EUR/USD has been in a downward trend since September, forming a series of lower highs and lower lows before running into support at 1.0180.

The pair remains vulnerable as the bearish trend persists and the RSI is below 50. Sellers will look to take out 1.0180 support to extend losses towards parity.

Meanwhile, buyers could be encouraged by the hammer candlestick on January 13 which could point to a bullish reversal. Buyers would need to rise above 1.0330, the November low, and 1.0460 to negate the near-term downtrend. A rise above 1.0630 the December high, creates a higher high.

 

Created on January 16, 2025

• During the trading session on Wednesday, we saw the US dollar drop fairly significantly against the Japanese yen, pressuring the pair to drop just below the ¥156 level. This was in direct reaction to the Core Consumer Price Index coming out at 0.23% month over month, under the expected 0.3% for that same period.
• That being said, it is worth noting that we have bounced a bit, and I do think that although the inflationary figures have dropped a little lower than anticipated, the reality is that we still have a long way to go before the Federal Reserve starts cutting rates. Quite frankly, this is a short-term reaction.

Technical Analysis

The technical analysis for this pair is still very strong, and it is probably worth noting that we have bounced enough to at least suggest that support should be held in this pair. If that’s going to be the case, then I suspect that we will find this pair reaching the ¥158 level much quicker than anticipated. With that being the case, I am still looking at this pair through the same prism that I was in the previous session, and I look at this as an opportunity to pick up “cheap US dollars”, at least until we were to break down below the ¥155 level.

It’s worth keeping in mind that the ¥155 level is also attracting the 50 Day EMA at the moment, which of course is a major technical indicator. With this, I think you have to look at the longer term trend and recognize that the markets have been bullish for some time. If we can break out above the ¥158 level, then I think it opens up the possibility of a move to the ¥160 level over the longer term. On the other hand, if we were to break down below the ¥155 level, then you might get a little bit more negative on this pair. However, you still get paid a swap at the end of every day, and that is something worth noting.

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The EURUSD price didn’t show any strong move since this morning, to continue fluctuating around the EMA50, thus, no change to the expected bearish trend scenario for today, which depends on the price stability below 1.0325$, while its targets begin at 1.0220$ and extend to 1.0100$ after breaking the previous level.

 

The expected trading range for today is between 1.0200$ support and 1.0360$ resistance

 

Trend forecast: Bearish

Ethereum price (ETHUSD) traded with clear positivity yesterday to touch our waited target at 3425.50$, noticing that the price finds good resistance there, to show some slight bearish bias, waiting to get positive motive that push the price to surpass this level and confirm opening the way to achieve more gains on the intraday and short-term basis, to head towards visiting 3570.00$ followed by 3680.00$ areas as next positive targets.

 

Therefore, we are waiting for positive trades in the upcoming sessions, taking into consideration that failing to breach 3425.00$ will stop the bullish wave and push the price to head towards testing 3222.00$ areas before any new positive attempt.

 

The expected trading range for today is between 3250.00$ support and 3520.00$ resistance.

 

Trend forecast: Bullish

The GBPJPY pair confirmed its surrender to the domination of the bearish bias by forming many negative waves and break 191.40 level, to notice achieving some waited negative targets by touching 189.90 level.

 

The price might face difficulty to resume the negative attack due to stochastic consolidation above 20 level, to expect providing some sideways trades until gathering the required additional negative momentum to attack 189.30 level, which breaking it will confirm targeting new negative stations that might start at 188.10 and 186.90 levels.

 

The expected trading range for today is between 189.30 and 191.60

 

Trend forecast: Bearish

Energy Markets Experienced a Strong Start at the Beginning of 2025

Energy markets experienced a strong start at the beginning of 2025, with global oil prices jumping to their highest levels in five months, registering a notable increase of an average of 10%.

This significant rise was driven by growing concerns over the potential reduction of Russian crude oil supplies to the global market, especially after the United States imposed a new round of sanctions on Russia’s energy sector.

Additionally, rising expectations of improved global demand, particularly with the strong economic growth led by the United States alongside intensive measures to stimulate the Chinese economy, contributed to this surge.

Recent decisions by the OPEC+ alliance also played a crucial role in determining the price trajectory, as an extension of production restrictions was announced to better balance supply and demand in the market.

On the other hand, geopolitical tensions in some oil-producing regions have heightened concerns among traders about supply stability. This has led to increased insurance costs for shipments, which in turn has impacted prices.

Furthermore, the decline in U.S. inventories has boosted optimism about market recovery, with recent data showing a significant drop in commercial stocks.

In light of these developments, energy experts expect the positive momentum of oil prices to continue during the first quarter of the year, with expectations of further increases if current conditions persist. However, the market remains sensitive to any sudden changes that might affect supply or demand.

This report details the main reasons behind the surge in oil prices, with a comprehensive analysis of future trends that may determine the market’s path in the coming months.

Price Outlook

• Since the beginning of 2025, the price of U.S. crude oil has risen by more than 10%, reaching its highest level in five months at $79.19 per barrel during trading on January 13.
• Brent crude oil prices increased by 9.25%, reaching $81.64 per barrel on January 13, the highest level since August 2024.

US Sanctions on Russia

On January 10, 2025, the United States imposed a new package of sanctions on Russia’s energy sector, targeting major companies such as “Gazprom Neft” and “Surgutneftegaz,” in addition to over 180 oil tankers.

These measures aim to reduce Russia’s revenues from oil and gas exports, as part of ongoing efforts to pressure Moscow due to the ongoing war in Ukraine.

Details of the Sanctions

• Targeted Companies: The sanctions include “Gazprom Neft” and “Surgutneftegaz,” two of Russia’s largest oil producers.
• Oil Tankers: Approximately 183 ships were listed in the sanctions, hindering their ability to transport Russian oil to global markets.

Reactions

• The Kremlin: Kremlin spokesperson Dmitry Peskov expressed concern that these sanctions could destabilize global energy markets, emphasizing that such decisions do not contribute to market stability.
• International Analysts: Energy experts indicated that these sanctions could increase pressures on global oil markets, leading to higher prices and supply fluctuations.

Potential Impact

These sanctions are expected to affect Russia’s ability to export oil and gas, potentially reducing its revenues from the energy sector. They may also cause disruptions in global energy markets, given Russia’s prominent role as a major source of oil and gas.

Top Russian Crude Oil Importers

In 2024, India and China emerged as the largest importers of Russian crude oil, benefiting from competitive prices and discounts offered by Moscow amidst Western sanctions.

India

• Import Volume: India imported approximately 1.64 million barrels per day of Russian oil during the 2023-2024 fiscal year, representing a 57% increase compared to the previous year.
• Share of Total Imports: Russian oil accounted for about 35% of India’s total crude imports, compared to 22% in the previous year.
• Impact on Other Sources: This shift led to a decrease in the Middle East oil share in India’s imports to 46%, the lowest level ever.

China

• Import Volume: China’s imports of Russian oil increased by 17% since the beginning of 2024, reaching 37.79 million tons, equivalent to approximately 2.28 million barrels per day.
• Share of Total Imports: Russian oil constituted about 22% of China’s total crude imports, compared to 18% in the previous year, reflecting increased reliance on Russian oil due to competitive prices.
• Impact on Other Sources: This shift resulted in a reduction in the share of traditional suppliers, such as Saudi Arabia, whose exports to China declined by 8% compared to the previous year.
• It also affected oil imports from the United States and Africa, as China preferred Russian oil due to its lower cost and the favorable payment terms offered by Moscow.

Turkey

• Share of Imports: Turkey accounted for about 7% of Russia’s total crude oil exports from December 2022 to December 2024.

European Union

• Share of Imports: Despite the sanctions, the European Union imported about 6% of Russia’s total crude oil exports during the same period.

This shift in oil flows reflects a reshaping of the global energy map, as Russia seeks to strengthen its relations with Asian countries to overcome the impact of Western sanctions, while countries like India and China benefit from opportunities to obtain oil at discounted prices.

Opinions and Analyses on the Sanctions

Traders and analysts have stated that Russian oil exports will be severely affected by the new sanctions, pushing China and India to obtain more crude from the Middle East, Africa, and the Americas, which will drive up prices and shipping costs.

• Analyst at BVM “Tamas Farga”: There are real concerns in the market about supply disruptions from Russia. It seems that the worst-case scenario for Russian oil could become a reality.
• Farga added: However, it is unclear what will happen when “Donald Trump” takes office next week. Farga clarified that the sanctions include a cooling-off period until March 12, so there may not be significant disruptions until now.
• Goldman Sachs estimates: The ships targeted by the new sanctions transported 1.7 million barrels per day of oil in 2024, or 25% of Russia’s exports.
• Analysts wrote in a memo: Goldman Sachs: It is increasingly likely that its Brent range forecast between $70 and $85 per barrel will lean upwards.
• Analysts at RBC Capital Markets: Doubling the number of tankers sanctioned to transport Russian barrels could pose a significant logistical problem affecting crude oil flows.
• Head of Research at Onix Capital Group “Harry Chelengiorian”: The latest round of sanctions by the U.S. Office of Foreign Assets Control targeting Russian oil companies and a large number of tankers will have particularly severe consequences for India.
• Analysts at JP Morgan: Russia has some room to maneuver despite the new sanctions, but it will ultimately need to acquire unsanctioned tankers or offer crude at $60 per barrel or less to use Western insurance as stipulated in the Western price cap.
• Market Strategist at IG “Yap Jon Rong”: The main headlines surrounding Russian oil sanctions have been the dominant driver of oil prices recently, coupled with resilient U.S. economic data, witnessing tighter supply and demand dynamics some momentum.
• Rong added: With prices rising rapidly and sharply by about 10% since the beginning of the year, it is driving profit-taking activity with some risks emerging around upcoming U.S. inflation data releases.
• Analysts at ING in a memo: These sanctions have the potential to pull up to 700,000 barrels per day from the market’s supply, which would erase the surplus we expect this year.
• Analysts added: However, the actual decline in flows is likely to be less, as Russia and buyers find ways to circumvent these sanctions, and it is clear there will be more pressure on unsanctioned ships within the shadow fleet.
• Philip Jones Lux from Sparta Commodities: The new sanctions on Russian tankers are expected to affect crude supplies to China and India, although the main players in these countries are still assessing the legal situation and possible solutions.

Extension of OPEC+ Production Cuts

In December last year, the OPEC+ alliance announced an extension of oil production cuts by two million barrels per day for an additional year, until the end of 2026 instead of 2025, as part of its ongoing efforts to support the stability of global oil markets and enhance the balance between supply and demand.

Additionally, the eight countries contributing to the voluntary oil production cuts, amounting to 2.2 million barrels per day, decided to extend the timeline for lifting these cuts by an additional three months, so they end at the end of March 2025 instead of the previous deadline at the end of the current December.

OPEC+ members are currently implementing production cuts totaling 5.9 million barrels per day, equivalent to about 5.7% of global demand.

• Included Cuts: Two million barrels per day from OPEC+ members continue until the end of 2026 after the latest decision.
• Contributed by 9 Member Countries: (Saudi Arabia, UAE, Iraq, Kuwait, Kazakhstan, Algeria, Oman, Gabon, and Russia) reducing production by 1.7 million barrels per day, ending by the end of 2025.
• Additional Voluntary Cuts: Eight countries (Saudi Arabia, Russia, UAE, Kuwait, Algeria, Oman, Iraq, and Kazakhstan) agreed to implement additional voluntary production cuts amounting to 2.2 million barrels per day, to end by the end of March 2025.

Harsh Weather and Global Demand

Harsh weather in Europe and the United States has had a notable impact on oil markets recently, as unusual weather conditions have contributed to increased demand for fuel and higher prices. The main impacts are as follows:

1. Increased Demand for Heating Fuel: A sharp drop in temperatures in Europe and the United States has led to increased consumption of heating fuels, such as diesel and heating oil. This rise in demand for refined products has put pressure on refineries and increased crude oil prices, the primary source of these products.
2. Production and Transportation Disruptions: In the United States, snowstorms and ice have led to the closure of some oil fields, particularly in major production areas like Texas. Transportation networks and infrastructure have been disrupted, affecting producers’ ability to deliver oil to local and international markets.
3. Short-Term Price Boost: Cold weather has helped support oil prices, which have seen significant increases. For example, futures contracts for Brent crude and West Texas Intermediate (WTI) crude have risen with ongoing expectations of cold weather conditions.
4. Impact on Inventories: Increased consumption of heating fuel has led to faster-than-expected draws from strategic inventories, especially in the United States, raising concerns about market balance. Energy Information Administration (EIA) data showed a larger-than-expected decline in inventories, prompting investors to buy more futures contracts in anticipation of potential shortages.
5. Divergence in Global Demand: While demand for oil rose in Europe and the United States, demand in Asia remained relatively stable due to milder weather conditions. This divergence has helped mitigate the sharp rise in prices on a global level.
6. Seasonal Factors: Although cold weather boosts oil demand during winter, the market is anticipating a return to milder temperatures in the coming months, which may lead to a gradual decline in prices. Outlook: If harsh weather continues longer than expected, the market may experience further upward pressure on prices. However, the return to climatic stability will rebalance supply and demand, especially if producing countries respond by increasing production to compensate for any shortages.

Global Interest Rate Cuts

Major central banks in the United States, Europe, the United Kingdom, Canada, and New Zealand continue to cut interest rates and ease tight monetary policies, aiming to halt the decline in economic activity and preserve achieved gains. Low interest rates typically reduce borrowing costs, which can boost economic activity and increase demand for oil.

Economic Stimulus in China

Chinese authorities took additional new stimulus measures during the last quarter of 2024 to support the country’s weak economic activities, which will also reflect in improved oil demand levels in the world’s largest crude importer.

Chinese authorities announced that they will adopt a “somewhat accommodative” monetary policy, according to an official statement issued by a meeting of senior Communist Party officials, a term last used in 2010 when they sought to support recovery from the global financial crisis.

According to the ruling party’s political office, the country will adopt a “sufficiently accommodative” monetary policy in 2025, alongside a more proactive fiscal policy to stimulate economic growth.

Key Challenges Affecting Oil Prices in 2025

The crude oil market in 2025 faces numerous challenges that could significantly impact its prices, including the following:

• Continued Geopolitical Uncertainty:

  • The ongoing war in Ukraine and tensions in the Middle East cast shadows over oil markets, leading to significant price volatility.
  • The war in Ukraine continues with no clear solutions in sight, keeping oil prices in a state of uncertainty.
  • China escalates its claims of sovereignty over Taiwan, raising fears of a war between the two countries.
  • Many countries impose sanctions on some oil-producing nations.

• Global Economic Slowdown:

  • A slowdown in global economic growth could lead to a decrease in fuel demand.
  • Many major global economies face recession risks this year, casting a gloomy shadow on oil demand forecasts and price declines.

• Increased Production from Non-OPEC+ Countries:

  • Some non-OPEC+ countries, such as the United States and Canada, are seeking to increase their oil production. This could lead to an oversupply in the market and negatively pressure prices.

• Shift Towards Renewable Energy:

  • Many countries are aiming to reduce their reliance on fossil fuels and transition to renewable energy sources.
  • The shift to renewable energy in the long term could lead to a decrease in oil demand and exert downward pressure on prices.

• Climate Change Concerns:

  • Concerns about climate change are increasing pressure on governments and companies to reduce carbon emissions.
  • These pressures could lead to restrictions on oil usage and a decline in demand and prices.

Top Oil Price Forecasts for 2025

• Bank of America expects oil prices to stabilize around $80 per barrel this year.
• Goldman Sachs Group forecasts oil prices to rise to $80 per barrel this year.
• Citibank Group expects oil prices to stabilize around $75 per barrel this year.
• Morgan Stanley Group forecasted oil prices to reach $75 per barrel by the end of 2025.
• Deutsche Bank expects oil prices to reach $90 per barrel by the end of 2025, citing supply shortages as a key factor supporting prices.
• Barclays Bank also raised its oil price forecasts by five dollars above the target price of $90 per barrel by the end of this year.
• Geoffries Financial Consulting Institute indicated that Brent crude could end the year at $95 per barrel.
• The World Bank expects the average Brent crude price to be $93 per barrel in 2025, attributing this to ongoing geopolitical tensions and OPEC+ production slowdowns.
• The International Energy Agency expects the average Brent crude price to be $90 per barrel in 2025.
• Argus Media expects the average Brent crude price to be $95 per barrel in 2025.

Best Oil Trading Companies January 2025

 

• Pepperstone – Best overall crude oil trading broker for beginners. Multiple regulated licenses. Founded 2010. Minimum deposit: $0. 20% discount on deposit.
• FPMarkets  – Established 2005. Ideal for trading Crude Oil (WTI/Brent) with competitive spreads and fast execution. Minimum deposit: $100.
• Plus500 – Best licensed broker for investing in crude oil futures. Founded 2008. Multiple regulated licenses. Minimum deposit: $100.
• XM – Top crude oil WTI trading platform for educational materials and copy trading. Founded 2009. Multiple regulated licenses. Minimum deposit: $5. Periodic competitions and bonuses.

 

74-89% of CFD retail investor accounts lose money.

Plus500 Futures trading is available to US residents only.

 

Technical Analysis of Crude Oil Prices

When applying the Fibonacci correction rule to different timeframes of oil prices, we find that there are signals suggesting the price direction towards recovering the upward trend in the medium to long term. After several attempts to reach the 50% Fibonacci level for the entire rise measured from historical lows around $0.44 to the recorded peak at $126.34, the price bounced upward and broke through a significant resistance level, as shown in the following weekly chart:

 

 

The price is attempting to break through the resistance level formed at the previously broken 38.2% Fibonacci correction level, forming a significant resistance at $78.25. Breaking this level represents a key confirmation for the continuation of the upward wave and the direction to achieve positive targets starting at $84.40 and extending to areas of $90.00 and then $96.60 in the medium term.

The Stochastic indicator shows negative signals on the weekly timeframe, which may hinder the price’s task of achieving the required breakout at $78.25 and delay the confirmation of the breakout. This indicates that we need a weekly close above this level to confirm the continued rise.

On the other hand, on the daily timeframe, we find that the price began an upward correction from the recorded low in 2023 at $63.76. We observe that the price surpassed the 23.6% Fibonacci level to build more upward waves in the short term, targeting the visit to the 85.70% level as the next corrective target.

 

 

Continuing the application of Fibonacci corrections to different timeframes, the four-hour chart shows that the upward wave initiated by the price from the $67.05 area faced temporary downward retracements, followed by a resumption of the main upward trend. This contributed to pushing the price higher by forming ascending flag patterns, as shown in the chart below. Currently, the price is undergoing a downward correction that may lead it to test the $76.40 areas before resuming the upward wave again.

 

 

The recent trades are confined within a descending sub-channel forming a continuation flag pattern, meaning that breaking $78.90 will provide a good positive incentive supporting the continued upward trend in the upcoming period, aiming to achieve the aforementioned positive targets.

In summary, the expected overall trend for the upcoming period is upward, confirmed by breaking $78.25 and then $78.90, to receive positive incentives contributing to the surge towards levels of $84.40, then further to areas of $90.00 and $96.60.

Conversely, it is crucial to note that failing to confirm the breach of $78.90 and a downward rebound breaking the $74.60 level will force the price to turn downward, incurring new losses that could reach areas of $63.40 in the short term.

Fibonacci Levels

• 50% Fibonacci Level: A Fibonacci correction level reached from $0.44 to $126.34.
• 38.2% Fibonacci Level: A significant resistance level at $78.25.
• 23.6% Fibonacci Level: A corrective level on the daily timeframe at $85.70.

Technical Indicators

• Stochastic Indicator: Shows negative signals on the weekly timeframe, which may hinder the price’s task of achieving the required breakout.

Four-Hour Chart

The four-hour chart shows that the upward wave initiated by the price from the $67.05 area faced temporary downward retracements, followed by a resumption of the main upward trend. This contributed to pushing the price higher by forming ascending flag patterns, as shown in the chart below. Currently, the price is undergoing a downward correction that may lead it to test the $76.40 areas before resuming the upward wave again.

Trading Channels

• Descending Sub-Channel: Recent trades are confined within a descending sub-channel forming a continuation flag pattern.

Summary

In summary, the expected overall trend for the upcoming period is upward, confirmed by breaking $78.25 and then $78.90, to receive positive incentives contributing to the surge towards levels of $84.40, then further to areas of $90.00 and $96.60.

Conversely, it is crucial to note that failing to confirm the breach of $78.90 and a downward rebound breaking the $74.60 level will force the price to turn downward, incurring new losses that could reach areas of $63.40 in the short term.

Conclusion

In conclusion, the expected overall trend for the upcoming period is upward based on technical analysis, with necessary confirmations at $78.25 and $78.90 levels to support the continuation of the upward trend and achieve positive targets. However, attention must be paid to critical support levels at $74.60 and $63.40 in the event of negative reversals.

Closing

The overall expected trend for the upcoming period is upward based on technical analysis, with the necessity to monitor vital support and resistance levels to ensure the achievement of desired targets and avoid potential risks.