Oversupply is still a keen issue for oil markets and today's crude oil inventories reading once again showed the market still has more to give when it comes to supply as crude oil inventory levels lifted by 1.18M. This oversupply issue has been close to my heart for some time as bulls in the market fail to see past the short term rig closures to the real threat and that is the middle east, which has not like to taper production in the slightest despite the deficits being run, and with Iran due to come online and ramp up production to bolster its economy we are a long time off seeing these lows disappear or the realisation of $100 barrels of oil anytime soon.

Today's push though signals that the bears believe that oil can drift below the sacred $40 barrel mark which has been a strong area for the past few months. If resistance at holds at $40.37 I would expect to see a push down to strong support at 38.87 and the emphasis in the markets to see if they can push even lower, which will likely lead to serious headaches in the oil sector. However, $30.00 barrels of oil are unlikely to be sustainable in the long run so this is more likely a short term if anything as you can expect to see companies go under at this level and oil rigs to mothball.

DAX traders have been hit by bearish conditions today as CPI flash estimates came in weaker than expected for the Euro-zone at 0.1%. This is not a good sign and certainly looks to bolster the case for further easing in the Euro-zone, however DAX traders were having none of that today and looked to push the DAX lower on this weaker than expected result.

There has been a strong bullish trend line for some time, and the DAX has for the most part got a strong correlation to American equity markets. Regardless of this it has the ability to climb without pressure from American markets, and at present there is certainly the case for further rises as it looks to touch the trend line. Disregarding the trend line the 20 D1 moving average is looking very strong as well given its past function of acting as dynamic support. Dropping below both of these levels support is likely to be found at 10907 and we may see strong buying pressure of this level as the bulls have looked to keep with the trend at present.

Lastly the rise in the NZDUSD is looking a little overbought and any push to resistance at 0.6711 is likely to be met with fierce selling pressure, as the market continues to find some strength in the wake of weak economic data. The 20 D moving average is sure to provide some support in the short term, but I don't see this being very long time and still am targeting prices much lower than the current levels we have seen over the past month.

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