Oil range trading, gold vulnerable

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.

For a look at all of today’s economic events, check out our economic calendar. www.marketpulse.com/economic-events/

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam
Craig Erlam

Latest posts by Craig Erlam (see all)