Yesterdays API data was strong as oil came in positive at 9.9 million barrels, however today's crude oil inventories has eclipsed as it as it showed a strong surplus of 10.37M barrels. This is a big positive for the oil bears but the bulls have taken control and for many this may be confusing, but the reason is quite simple as crude oil production has actually fallen 2.65% y/y and people are taking notice of this key statistic as the market continues to look for some sort of equilibrium. Obviously the recent OPEC speculation that production might be tapering of there as well and within Russia is stirring the markets into a bit of speculation that the bears days may actually be , but I am still a little cautious given the large surpluses that we are continuing to see.

On the charts the jump upwards has so far found some stiff resistance at 34.83 and as I type this the market continues to test this level as it looks to leap higher on the production data news out of the US. For me it seems very realistic that we may see an actual breakout higher here and the next level of resistance will likely be found at 38.04, but this level is seen as quite strong and it may take the market some time to actually push through unless we see strong drops in production levels - something that has so far remained elusive.

The Australian dollar surprised many in the market today and even myself as GDP data came out much stronger than anticipated from the market as it came in 3.0% y/y (2.5% exp). Now this was a shock result for the Australian economy and many were a little surprised hence the strong jump in the AUDUSD which had so far remained rather downtrodden. This coupled with the recent comments from the Reserve Bank of Australia have boosted the positive sentiment in the Australian economy as a whole. However, with China slowing down I still remain very cautious about the future of the Australian economy and it would be foolhardy to think that this level of growth can be sustained if China continues to falter in the global economy.

Chart wise the AUDUSD has climbed back up the 73 cent level and is starting to look very bullish for the most part. Resistance at 0.7303 managed to hold back any further gains on the charts, but it is unlikely to hold back any further positive data on the charts if it does happen again soon. Nevertheless if there is any further drops on the chart the bullish trend line that has been in play for some time is likely to act as dynamic support in this instance and likely look to propel the AUDUSD higher, especially if rates continue to remain unchanged, thus driving traders into the AUD in search of fixed interest returns. 

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