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  • The US Dollar is moving higher after a blowout NFP report bolstered confidence in the US economic recovery. Markets will now turn attention to next week’s US inflation data which could boost the Greenback. Get your market alert from @FxWestwater here: https://t.co/Ud62r3hKRF https://t.co/dvvDCJvlbP
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Crude Oil Nears Resistance, Gold Up on Fed. BoE, Moderna Vaccine Approval Next

Crude Oil Nears Resistance, Gold Up on Fed. BoE, Moderna Vaccine Approval Next

Daniel Dubrovsky, Strategist

Crude Oil, Gold, Fed, BoE, Jobless Claims, Moderna Vaccine, Technical Analysis - Talking Points:

  • Crude oil up as US inventories shrink more sharply than expected
  • Gold rose on Fed, eyeing BoE, jobless claims, Moderna vaccine
  • WTI eyeing February inflection point, XAU/USD to 50-day SMA
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Crude oil prices aimed higher on Wednesday, propelled by the latest EIA inventory report. Last week, stockpiles contracted by 3.1 million barrels, far larger than the -1.1m projection. This helped offset losses from softer-than-expected US retail sales earlier in the session, hinting at trouble brewing in the largest component of GDP from the world’s largest economy - consumption.

Anti-fiat gold prices also rallied over the past 24 hours, particularly enjoying the last FOMC monetary policy announcement of the year. While the Fed upgraded economic projections, including those to inflation, Chair Jerome Powell clearly underpinned the central bank’s accommodative stance. Keeping benchmark lending rates low, while continuing asset purchases to bolster CPI, makes for a favorable XAU/USD environment.

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The US Dollar also weakened, amplifying gains in commodities and precious metals that are traded mainly in the greenback around the world. Gains in growth-linked crude oil and gold extended during Thursday’s Asia Pacific trading session. A healthy jobs report out of Australia, coupled with the aftermath of the Fed, likely played a role in keeping risk trends afloat and the USD under pressure.

The focus now shifts to the Bank of England, US data and the FDA’s anticipated approval of Moderna’s coronavirus vaccine. The BoE may echo the dovish undertones of the Fed, further supporting gold. During the Wall Street session, initial jobless claims could disappoint as policymakers remain in a stalemate over bipartisan fiscal aid. This is as the country just hit a grim record of 3.8k Covid deaths in a day.

Crude Oil Technical Analysis

WTI crude oil prices are extending gains beyond 46.24, the former resistance level that held persistently last week. This is bringing prices closer to the 49.42 inflection point from earlier this year. Moreover, these movements reflect the bullish underpinnings of a ‘Golden Cross’ between the 20-day and 50-day Simple Moving Averages (SMAs) that formed in November. Keep a close eye on these in the event of a turn lower.

Oil - US Crude MIXED
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 12% -3% 2%
Weekly -10% 28% 11%
How can retail positioning drive crude oil prices?
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WTI Crude Oil Daily Chart

Crude Oil Nears Resistance, Gold Up on Fed. BoE, Moderna Vaccine Approval Next

Chart Created Using TradingView

Gold Technical Analysis

While gold prices have pushed higher in recent days, the 50-day SMA remains in play as key resistance. A climb above this point with confirmation may overturn the bearish implications of a ‘Death Cross’ from September. Moreover, recent price action to the upside echoes the bullish signal from the breakout above a ‘Falling Wedge’ on the daily chart below.

Gold MIXED
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 2% -4% 1%
Weekly 4% 14% 5%
How can retail positioning drive gold prices?
Get My Guide

XAU/USD Daily Chart

Crude Oil Nears Resistance, Gold Up on Fed. BoE, Moderna Vaccine Approval Next

Chart Created Using TradingView

--- Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter

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

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