USOIL Cautious after its 2-Day Rebound Ahead of the US Fed
The commodity made a strong start of the week, as fears over the health of the financial system ebbed, but faces pressure today, as markets brace for the Fed’s policy decision
Commodities are the objects of trade in commerce around the world. Gold, silver, oil: Commodities are the goods exchanged raw, rather than in a manufactured state. Commodities can be traded in physical states, as in gold bars, using futures and spot prices. Many traders, however, use electronic trading, as in EFTs, in lieu of physical shares, focusing instead on the spread of the buy and sell price. Dive deeper into commodity markets.
The commodity made a strong start of the week, as fears over the health of the financial system ebbed, but faces pressure today, as markets brace for the Fed’s policy decision
Gold’s daily candlesticks are trading in their bullish channel between the upper blue and red bands. The red Bollinger bands have expanded due to an increase in volatility. The longer the precious metal remains in this channel, the greater the likelihood of further price appreciation.
Gold is generally inversely correlated to the US 10-year real rate. There may be short periods when they sync up positively, but these are rare. The current correlation coefficient is -59%.
USOil’s daily chart is trading in its bearish channel between the lower blue and red bands. The red Bollinger bands are moving in opposite directions as volatility has increased. The longer it maintains this channel the more pressure will be applied to the USOil price.
The last three trading sessions has seen the US 02-year decline from 5.076% to 4.055%. Today’s trading is especially frenetic after weekended endeavours by regulators to stave off a bank run and prevent contagion from the SVB failure. Over the same period money has rotated into gold as a safe haven.
USOIL was brought down by Fed Chair Powell’s hawkish testimony, which reinforces the higher-for-longer narrative, but finds some reprieve by the drop in US stockpiles
Copper has charted a series of higher troughs (HT), followed by higher peaks (HP). This puts the base metal into uptrend. Copper has found support at the 50% retracement, and may chart the next higher trough (HT?) in the series.
China’s official manufacturing PMI posted its highest figure since 2012 in February, helping USOil look past another US stockpile built-up
FXCM’s CFD for Brent, UKOil, and its WTI CFD, USOIL, have both moved into their bullish channel on the H4 time frame. Oil is responding to forecasts for China’s growth.
This week’s economic releases and hawkish remarks by central bank officials, solidify recent market repricing around the Fed’s terminal rate, sending XAU/USD lower
US crude oil inventories rose last week according to the latest data, but prices are supported by strong demand outlook for the year, due to China’s reopening
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