Crude oil approaches resistance, gold rises against the Fed. BoE, Moderna vaccine approval Next

Crude Oil, Gold, Fed, BoE, Unemployment Claims, Moderna Vaccine, Technical Analysis – Discussion Points:

  • Crude oil rises as US inventories shrink sharply than expected
  • Gold rose on Fed, eyeing BoE, unemployment claims, Moderna vaccine
  • WTI facing the turning point in February, XAU / USD at 50-day SMA

Crude oil prices moved higher on Wednesday, driven by the latest EIA inventory report. Last week, inventories were down 3.1 million barrels, far more than the -1.1 million forecast. This helped offset losses from the unexpectedly weak US retail sales at the beginning of the session, suggesting that the largest component of GDP in the world’s largest economy – consumption – was experiencing brewing issues.

Anti-fiat gold prices have also rebounded in the past 24 hours, largely due to the FOMC’s last monetary policy announcement of the year. While the Fed improved economic forecasts, including inflation forecasts, Chairman Jerome Powell clearly backed the central bank’s accommodative attitude. If policy rates are kept low and assets continue to be bought to bolster the CPI, the XAU / USD environment will be favorable.

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The US dollar also weakened, adding to gains in commodities and precious metals, which are mainly traded in the greenback around the world. Gains on growth-linked crude oil and gold rose during Thursday’s Asia-Pacific trading session. A report on healthy jobs from Australia, linked to the Fed’s aftermath, likely helped maintain risk trends and keep the USD under pressure.

The focus is shifting to the Bank of England, U.S. data, and the expected FDA approval of Moderna’s coronavirus vaccine. The BoE could reflect the Fed’s dovish undertones and continue to support gold. During the Wall Street session, initial jobless claims could disappoint as policymakers remain in a stalemate on bipartisan tax aid. This is when the country just hit a grim record of 3.8,000 Covid deaths in one day.

Technical crude oil analysis

WTI crude oil prices are extending gains past 46.24, the previous resistance level that persisted last week. This brings prices closer to the 49.42 tipping point from earlier this year. In addition, these moves reflect the bullish fundamentals of a “golden cross” between 20 and 50 days Simple moving averages (SMAs) that were formed in November. Keep an eye on this in the event of a deep turn.



of customers are net long.



of customers are net short.

Change in

Longs

Shorts

OI

Every day 2% -6% -3%
Weekly -4% -3% -4%

WTI Crude Oil Daily Chart

Crude oil approaches resistance, gold rises against the Fed.  BoE, Moderna vaccine approval Next

Chart created with TradingView

Gold Technical Analysis

While gold prices have risen in the past few days, the 50-day SMA remains in play as the key drag. Ascending above this point with confirmation can cancel out the bearish effects of a ‘death cross’ starting in September. In addition, the recent upside movement reflects the bullish signal of the breakout above a ‘Falling wedge‘on the daily chart below.



of customers are net long.



of customers are net short.

Change in

Longs

Shorts

OI

Every day -4% -5% -4%
Weekly -2% 0% -2%

XAU / USD daily chart

Crude oil approaches resistance, gold rises against the Fed.  BoE, Moderna vaccine approval Next

Chart created with TradingView

— Written by Daniel Dubrovsky, Currency Analyst at DailyFX.com

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

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