Oil intermarket: watching DXY falling and demand driven market for $50bbls

Oil has been capped by the recent release of the private inventory data in the weekly API crude stock.

Oil has rallied to $46.70 from $45.32 in an extension of yesterday's upside from $44.36 on the OPEC news while at the same time, the DXY has been playing its part, down from 95.42 and making recent lows of 94.79, off 0.65% in the late in the European morning overnight and the largest largest drop in two weeks. "The proximate cause being cited by participants and the media is weak US data that is prompting a Fed re-think," explained analysts at Brown Brothers Harriman.

However, the S&P correlation has broken down in a demand driven market with the recent sell-off to 2178 despite 30 year yields back above 2.00 and trading at 2.30 while oil remains strong. A bid on Wall street again could add further fuel and ignite the oil, especially of the US dollar continues to under perform as markets continue to discount the chances of a Fed hike in September. 

The price of oil today made it through the 50 and 100 day MA's at $46.26 and $46.10 as well as the 200 dma at $43.07 as a firm base to the downside, a break of DXY below 94 sets up further advances in oil towards $50.00 again.