The last few days brought us a correction on the USD. In theory, a weaker dollar should support commodities but that’s just an expected reaction that won’t necessarily be applicable in these volatile times that we are living now. As if the corona-crash wasn’t enough, we also have a price war in the oil market which is a bearish brother-in-arms of the industry’s crippling demand. As you can see, the oil market macro-environment is rather pessimistic.
The technical situation does not look any better. The price bounced from 20 USD/bbl. and tested the 28 USD/bbl, the level is the closest resistance before going into a downswing. Most recently, the price was creating a pennant and broke its lower line. That breakout is a negative factor and hints at further slide south.
A weaker USD along with global turmoil help gold. Technically, gold found local support, slightly bellow the 160a 0 USD/oz level and will most likely use it to make an attempt at new mid-term highs. The sentiment here is definitely positive.
Let’s also look at the S&P 500, where the last day brought us a decisive bearish victory. The price failed to continue a bearish attack and failed to break the 23.6% Fibonnaci and the resistance on the 2550 points. We also managed to break the short-term up trendline coming from the latest correction. As long as we stay below the green area, the sentiment will remain negative.
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