Oil markets have suffered another blow today as US oil inventories showed an increase of 2.07M barrels (-2.1M exp), while at the same time US gasoline inventories also showed a strong increase to 4.6M (0.5M exp). This has come as a bit of surprise for the market which had been expected drawdown’s and probably more so for OPEC and its allies, as they look to ramp up production to find an equilibrium and maximize profits from the high oil price we have at present. Certainly the OPEC meeting due out on the 22nd of June will be very interesting, where it is expected that Saudi Arabia and Russia will continue their ramping up of prices. Many are expecting that with Iran out of the picture this does give the Saudis and Russia the chance to put production up even if the price if oil is not doing well.

On the charts it has been very bearish for oil as of late. So far we saw a peak for oil at 72.81, followed by oil falling back down to earth in a hurry – not surprising given that oil trending very hard, and it does not always continue. This bullish buy hit resistance at 65.75 when trying to claw back some ground against the bears and it really does look like it may struggle to breakthrough this level in the interim. For bearish traders feasting off the data the next levels of support can be found at 64.17, with the potential to extend even lower to 62.65 in the long run. I would also focus on the long term potential trend line as well, which could propel oil to something further in the long. Looking at the bulls however resistance as mentioned above can be found at 65.75 and 67.45 in the long run, but it may take some cracking to get them through given the OPEC meeting.

One of the other key winners today was the NZD which enjoyed the risk sentiment of the market as it started. So far the despite positive data the US market has enjoyed, it has translated into more foreign investment outside the US in other currencies and the NZD and AUD were no exception today.

Looking at the charts we can see that the NZD has cracked through the important 70 cent barrier mark and is climbing higher, but has stumbled against resistance at 0.7035. With bullish traders looking to assert themselves it would seem that the NZDUSD could end up taking on the next level of resistance at 0.7171 if the bulls stay in control. On the flip side support still remains at 0.6966 and 0.6819 in the long run.