Crude Oil, Gold Prices Face Seesaw Volatility on "Brexit" Vote
- Crude oil prices snap winning streak, retreat from 2-week high
- Gold prices stall following largest one-day decline in a month
- Overnight risk-on dynamics may fade as “Brexit” vote begins
Crude oil prices turned lower as risk appetite softened on Wall Street, with the WTI contract following the benchmark S&P 500 index downward into the session close. Gold prices were little-changed after yesterday’s sharp selloff as Fed Chair Janet Yellen struck a familiar tone in testimony to the House of Representatives, offering little to alter the trajectory of established policy bets.
The yellow metal is edging lower while oil prices are attempting to find upward momentum as risk appetite firms overnight. Optimism follows new polling data arguing in favor of a victory for “Bremain” in the upcoming UK EU membership referendum. European and US stock index futures are pointing higher, hinting that the upbeat aims to carry forward.
With that said, follow-through may be compromised as UK voters begin to cast their ballots. Sentiment has proven highly sensitive to even minor shifts in preference for the Leave versus Remain campaigns. With news-flow sure to be swamped with stories from the front lines of the referendum vote, it seems easy to imagine sharp seesaw volatility as conflicting headlines pull prices in opposite directions.
Did gold and oil price action match DailyFX analysts’ expectations? Find out here!
GOLD TECHNICAL ANALYSIS – Gold prices stalled at chart support after turning downward as expected. From here, a break below the 23.6% Fibonacci expansionat 1260.29 on a daily closing basis targets the 14.6% level at 1237.13. Alternatively, a move above the 1297.87-1303.62 area (38.2% Fib, May 2) exposes the 50% expansion at 1328.25.
CRUDE OIL TECHNICAL ANALYSIS – Crude oil prices snapped a three-day winning streak, turning lower after touching a two-week high. Near-term support is at 45.60, the 23.6% Fibonacci retracement, with a break below that on a daily closing basis exposing the 38.2% level at 41.86. Alternatively, a push above the 23.6% Fib expansion at 51.86 targets the 38.2% level at 55.60.
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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