We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bullish
GBP/USD
Mixed
USD/JPY
Bullish
Gold
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Bitcoin
Mixed
More View more
Real Time News
  • Forex Update: As of 11:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.27% 🇬🇧GBP: 0.17% 🇪🇺EUR: 0.11% 🇦🇺AUD: 0.07% 🇨🇦CAD: -0.00% 🇯🇵JPY: -0.00% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/00soyUHmJz
  • RT @LiveSquawk: OPEC+ So Far Has No Plans To Deepen Current Oil Output Cuts During December Meeting – RTRS Sources #OOTT $CL_F
  • RT @C_Barraud: 🇩🇪 Moody’s downgrades outlook for German banking system to negative - CNBC *Moody's link: https://t.co/ms8Wi1Ngom https://t.…
  • OPEC is likely to extend existing oil supply cuts until June when group meets in December with no plans to deepen current oil output cuts, according to OPEC sources #OOTT
  • RT @PantheonMacro: Our Chief Eurozone Economist @ClausVistesen was on the @DailyFX Podcast with @MartinSEssex recently, discussing the path…
  • Indices Update: As of 11:00, these are your best and worst performers based on the London trading schedule: US 500: -0.01% Wall Street: -0.01% Germany 30: -0.22% France 40: -0.39% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/RBUUmEBTY6
  • Geopolitical developments send #oil prices soaring or falling. Get your market update from @MartinSEssex here:https://t.co/XVXLyG8vjq #OOTT https://t.co/ASueyzgMgA
  • LIVE NOW: Join Currency Strategist @PaulRobinsonFX as he discusses a wide range of topics with emphasis on psychology, trade execution, and risk management with the goal of helping traders improve performance. Register here: https://www.dailyfx.com/webinars/602330483?CHID=9&QPID=917720
  • Join @CVecchioFX 's #webinar at 6:30 AM ET/11:30 AM GMT as he discusses the most relevant information from the world's most influential central banks. Register here: https://t.co/HyPgSrhjor https://t.co/2eOfuBTN3Z
  • China invites US trade negotiators for more talks - WSJ
Crude Oil Likely to Decline While Gold Gains on Soft US Economic Data

Crude Oil Likely to Decline While Gold Gains on Soft US Economic Data

2011-05-30 10:27:00
Ilya Spivak, Sr. Currency Strategist
Share:

Commodities – Energy

Crude Oil Consolidation to Yield to Renewed Selling

WTI Crude Oil (NY Close): $100.59 // +0.36 // +0.36%

Prices continue to consolidate below the 38.2% Fibonacci retracement of the drop from the May 2nd high at $102.35. A break above this boundary exposes the 50% level at $104.73. Broadly speaking, anything shy of that keeps the overall structure broadly bearish. Near-term support stands at the psychologically significant $100 figure, followed by the 5/6 low at $94.65.

A quiet session is ahead, with futures markets closing early in the US for the Memorial Day holiday. Prices came under pressure overnight, which newswires chalked up to positioning ahead of this week’s packed US economic calendar that threatens to show the world’s top economy is meeting with strong headwinds. Most critically, separate reports are expected to show that growth in the US manufacturing sector slowed for the third consecutive month in May to the weakest pace since October 2010 while the economy added just 185,000 jobs, the least since January.

Indeed, a Citigroup index tracking positive US economic surprises suggests the trend in data releases has been pointing to steadily deterioration. The rapid approach of the expiration of QE2 – set to conclude with the Fed’s final bonds purchase on June 9 – ought to compound downward pressure. As we have suggested repeatedly over recent weeks, the program’s end is likely to precede a rise in US borrowing costs through the second half of the year, which is likely to unleash a short-term unwinding of bets on a range of risky assets (including crude) as well as long-term downward pressure on economic growth when it is already clearly fragile.

Crude_Oill_Likely_to_Decline_While_Gold_Gains_on_Soft_US_Economic_Data_body_Picture_3.png, Crude Oil Likely to Decline While Gold Gains on Soft US Economic Data

Commodities – Metals

Gold to Extend Rebound Amid Risk Aversion

Spot Gold (NY Close): $1536.40 // +17.25 // +1.14%

Prices have taken out resistance at $1533.12, the 61.8% Fibonacci retracement of the drop from the May 2 high, clearing the way for an advance to the 76.4% level at $1549.91. The 61.8% Fib has been recast as near-term support, with a break back below that targeting the 50% retracement at $1519.55.

Gold’s recently rediscovered role as a safe haven asset may allow the metal to rise this week if the pessimism felt overnight about the upcoming set of US economic releases persists upon the return of liquidity to the markets following the Memorial Day holiday. The reemergence of Euro Zone sovereign risk fears over the weekend further bolster the case for short-term gains. Greek CDS rates hit the highest in a week overnight after Der Spiegel reported the country would not meet any of the fiscal goals set out in the terms of the EU/IMF bailout deal.

Crude_Oill_Likely_to_Decline_While_Gold_Gains_on_Soft_US_Economic_Data_body_Picture_5.png, Crude Oil Likely to Decline While Gold Gains on Soft US Economic Data

Spot Silver (NY Close): $37.99 // +0.69 // +1.86%

Prices are wedged between $36.44 and $38.99, the 23.6% and 38.2% Fibonacci retracements of the 4/25-5/6 decline, respectively. The correlation between gold and silver remains iron-clad, hinting the cheaper metal is likely to follow its more expensive counterpart higher if risk aversion grips financial markets anew. As we have noted previously, a significant inverse correlation between the gold/silver ratio and the S&P 500 hints the yellow metal will outperform if a flight to safety materializes.

Crude_Oill_Likely_to_Decline_While_Gold_Gains_on_Soft_US_Economic_Data_body_Picture_4.png, Crude Oil Likely to Decline While Gold Gains on Soft US Economic Data

For real time news and analysis, please visit http://www.dailyfx.com/real_time_news

To receive future articles by email, please contact Ilya at ispivak@dailyfx.com

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.