Talking Points:
- Crude oil prices hit two-week high on OPEC meeting hopes
- Gold prices digesting having plunged after US jobs report
- Consolidative tone likely ahead, API inventory data on tap
Crude oil prices rebounded to a two-week high after OPEC President Mohammed Al Sada said the cartel will hold an informal meeting in Algiers next month. The comments fueled hopes for output-side relief after the WTI contract fell to a four-month low last week.
Gold prices are in digestion mode after Friday’s sharp decline – the largest in three months – following a dramatically better-than-expected US jobs report. The outcome bolstered Fed policy tightening bets, pushing yields higher and undermining support for anti-fiat assets.
Looking ahead, a lull in high-profile news flow may make for a quiet consolidative session. The absence of a readily apparent focal point could make for increased sensitivity to headline risk however, fueling knee-jerk volatility. The API estimate of weekly crude inventory flows may also be a near-term market mover.
Track short-term gold and crude oil price patterns with the GSI indicator.
GOLD TECHNICAL ANALYSIS – Gold prices recoiled downward from one-month highs having rebounded as expected after producing a bullish Piercing Line candlestick pattern. From here, a rebound above the 38.2% Fibonacci expansion at 1377.75 targets the 50% level at 1398.46. Alternatively, a daily close below rising trend line support at 1335.41 exposes the 38.2% Fib retracement at 1308.00.
CRUDE OIL TECHNICAL ANALYSIS – Crude oil prices are attempting to recover after putting in a bullish Morning Star candlestick pattern. A daily close above the 43.94-44.40 area (38.2% Fibonacci retracement, support-turned-resistance) opens the door for a test of the 50% level at 45.41. Alternatively, a reversal back below the 23.6% Fib at 42.12 targets the 14.6% retracement at 40.99.
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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