Talking Points:
- Gold stayed flat as investors stay put before event risk in March
- Oil stabilized after good US growth data and weekly gain, producers continued to merge
- Copper retraced lower within range due to profit taking, ahead of China’s industrial production data
Oil price stabilised on Monday after a 15 percent rise last week, although it is facing a tough resistance at 34.25. Friday’s upward momentum was scaled down by oil and equity losses in New York, until positive fourth-quarter GDP and inflation PCE restored market confidence.
Copper price also headed up to a long term resistance level at 2.1485 and nearly touched a resistance trend line before profit taking brought it back within range. Metals market will be watching China’s industrial production data on Tuesday, followed by the US Non-farm payrolls on Friday. In the absence of updates in copper fundamental, the metal will remain vulnerable to growth indicators.
Gold price traded flat for another session despite broad gains in USD and profit taking in risk assets. Coming into an eventful month of March, investors perhaps set on wait-and-see on major data releases before any position adjustment. The European Central Bank and US Federal Reserve are both meeting on interest rate decision this month, albeit with opposite biases. This makes for an interesting divergence in the positioning of EUR, USD and of course volatility hedge via gold, JPY.
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GOLD TECHNICAL ANALYSIS – Gold price traded in a consolidation mode above support trend line. Flat momentum indicates no surprise expected in either direction. Moving averages have also turned mixed after early sign of an upturn in February.
Daily Chart - Created Using FXCM Marketscope
COPPER TECHNICAL ANALYSIS – Copper price briefly broke above the 2.1485 resistance level although today retreated within the range. Chances for higher moves over the trend line are slim, given apparent downward pressure. The trend line remains a firm resistance indicator.
Daily Chart - Created Using FXCM Marketscope
CRUDE OIL TECHNICAL ANALYSIS – Oil price is forming a double top around the resistance level of 34.25. Flat momentum signals indicate a non-breach here. Investors may prepare for downward reversal should this top holds out for the second time.
Daily Chart - Created Using FXCM Marketscope
--- Written by Nathalie Huynh, Currency Strategist for DailyFX.com
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Contact and follow Nathalie on Twitter: @nathuynh
