Oil: WTI Technical Analysis
As anticipation builds around the upcoming U.S. job numbers for August, the oil market faces heightened volatility this week. This uncertainty compounds existing concerns stemming from weak Chinese demand and the fading enthusiasm over Saudi and Russian production cuts.
From a technical perspective, the bearish momentum for WTI persisted over the past two weeks, pushing the price below the daily Middle Bollinger Band at $81.30. While the 50-day Exponential Moving Average (EMA) offered support at $78, according to Sunil Kumar Dixit, chief technical strategist at SKCharting.com.
In the upcoming week, a breach beneath the horizontal support level of $77.60 enhances the likelihood of WTI’s further descent towards the 200-day Simple Moving Average (SMA) at $75.90. This support is closely trailed by the 100-day SMA at $75.20, which typically keeps WTI apart from the 200-day SMA.
To the upside, WTI must recapture the daily Middle Bollinger Band at $81.30. A daily close above this level could propel the price towards the previous week’s peak of $82.50.
Beyond this, $83.20 represents a minor challenge before encountering pivotal resistance points in the form of the 100-week SMA at $85.75 and the monthly Middle Bollinger Band at $86.75.
In conclusion, for the upcoming week, Dixit indicates that short-term resistance could be observed around $81.25, while support might emerge at $78.25.
Gold: Market Sentiment and Technical Analysis
For a second consecutive week, the gold market witnessed subdued activity as market participants absorbed the Federal Reserve’s warning about potential rate hikes to curb U.S. inflation, currently at 3%, and bring it down to the 2% target.
Gold futures‘ most-active December contract on New York’s Comex concluded at $1,943.30 per ounce after officially settling Friday’s session at $1,939.990, marking a decline of $7.20 or 0.4%.
Spot gold, which closely tracks real-time bullion transactions and garners attention from certain gold traders, settled at $1,914.60, down $2.12 or 0.1%.
Gold: Bullion Technical Outlook
Should spot gold breach the $1,908 level, it will prompt a retest of the $1,900 support, below which immediate support awaits at $1,885, notes SKCharting’s Dixit.
Dixit further suggests that the main downside potential for spot gold currently lies at $1,850.
Conversely, surmounting the $1,930 obstacle could extend gold’s upward trajectory, targeting the next significant level, the descending weekly Middle Bollinger Band at $1,950.
Dixit adds, “This zone could serve as a pivotal turning point for spot gold.”
In summary, as both the oil and gold markets navigate a complex landscape of macroeconomic factors and technical dynamics, traders and investors should carefully observe key levels and indicators to make informed decisions in these uncertain times.
