Venezuela has gone bankrupt.

International Swap and Derivatives Association (ISDA) has announced that Venezuela has gone bankrupt. The same verdict was announced in the case of the state-owned fuel concern Petroleos de Venezuela SA. The unanimous decision of the ISDA committee, in which the blatant delays in regulating the obligations of both entities constitute the so-called "credit event" opens the way for a credit default swap (Credit Default Swap).

According to Reuters, the ISDA committee will meet again today to decide on an auction mechanism that will determine the number of payouts for CDS owners. The agency underlines, however, that the Venezuelan ($ 1.3 billion) and PDVSA ($ 250 million) contract market is not too large compared to the size of the debt. The market for both entities is $ 60 billion, while private-equity estimates say $ 140 billion. On Sunday, a 30-day period has gone in which Venezuela could delay the payment of interest of $ 200 million due to bonds maturing in 2019 and 2024. As a result of this failure, the S&P rating agency downgraded Venezuela's rating to SD for "selective insolvency". In turn, Fitch rating agency announced the insolvency of PDVSA.

The risk of formal bankruptcy by Venezuela has been hanging over the market for several months. The country has been balancing on the solvency curve for a long time, with a hard time adjusting its liabilities in US dollars. The sanctions imposed by the US government deterred US investors from buying Venezuelan bonds.

Let's now take a look at the Crude Oil technical picture at the H4 time frame.as Venezuela is among the global leaders in the oil industry. The market has bounced from the important support at the level of $55.26 and the bulls have managed to break out above the technical resistance at the level of $56.38. Currently, the market is trading in the middle of the range and there are no signs of panic buying or selling due to Venezuelan bankruptcy. The nearest resistnace is seen at the level of $57.70.