Oil remains in the middle of its range
Oil has reversed earlier losses to trade a little higher on the day. It continues to trade around the middle of its two-week range though, with resistance around USD54 in WTI and support around USD52. Both look pretty firm at the minute, with a break below potentially opening up a move back towards USD50, representing a minor correction from the highs while remaining in extremely healthy territory.
Brent is obviously seeing a similar trend unfold, with resistance around USD57 and support USD54.50. The fundamentals haven’t really shifted. The near-term demand risks have been offset by Saudi cuts and longer-term risk of US shale will become clearer in the coming months. For now, prices look pretty comfortable above USD50.
USD piling pressure on gold
The dollar is up more than 0.5% today which is putting downside pressure on gold. The yellow metal has bounced back during the session after falling towards USD1,830. It now finds itself just below USD1,850 ahead of the Fed meeting. The dollar is benefiting from risk aversion in the markets and, should that continue, gold will likely see a strong test of support, built up in the USD1,800-1,830 region.
The dollar index is closing in on 91 once again and a breakout could be a very bullish near-term signal for the greenback. This has been a major level of resistance for the dollar on a few occasions over the last month and a break could be the catalyst for quite a bullish move, piling pressure on gold and those support levels.
Bitcoin seeing another assault on USD30,000
Bitcoin is seeing yet another test of a key support zone for the cryptocurrency. This is the third major test of USD30,000 and on each previous occasion, the rebound off it has been less convincing. While this doesn’t necessarily mean a break lower is inevitable, the pressure is undoubtedly building and a collapse of this level could trigger a rapid decline and bring USD20,000 back into play before too long. It’s still early days though; the level is once again being defended strongly. Time will tell how successful that will be.
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