Oil And Gold Looking Good In Asia Trading
MarketPulse | May 22, 2017 04:21AM ET
Both oil and gold present constructive technical pictures mid-session in Asia following their Friday rallies.
Crude oil soared over two percent on Friday as rumours swirled that OPEC’s working group the ECB was considering recommending the double whammy of a production cut extension and deeper cuts ahead of this Thursday’s meeting. With the extension by OPEC and Non-OPEC already priced in, the added teaser of deeper cuts added fuel to the fire and capped an excellent week by both crude contracts.
We are somewhat sceptical that any more cuts can be on the agenda though, if only because of time constraints involved in thrashing out the details before Thursday. Having said that the market had discounted all hope of OPEC and Non-OPEC coming together to produce the cuts in January so maybe it is a case of where there is smoke, there is an oil fire.
Traders were not bothered with such thoughts, however, with Brent and WTI spots finishing Friday at their highs of 53.63 and 50.43 respectively. The positivity has carried on in early Asian trading with both contracts trading higher to start the week.
Brent spot trades at 53.75 and has closed above its 100-day moving average at 53.40, now initial support followed by the pivotal 52.40 region. Resistance lies in wait at 54.50.
WTI spot trades at 50.60, just below its 100-day moving average at 50.80 which is initial resistance followed by 52.00. Support sits in the 49.50 region followed by 47.90.
Both contracts look extremely constructive from a chart perspective, but both with be subject to the nuances of headlines as we approach Thursday’s meeting. We would expect choppy price action meaning traders should be nimble this week.
Gold
After Thursday’s massive pullback, gold found its mojo again on Friday, rising 10 dollars to 1256 as traders hedged weekend event risk. Unsurprisingly, some of that risk hedging has been unwound in early Asia trading with gold falling from 1258 to 1253 in the session and completely ignoring North Korea's latest missile test.
Get The News You Want
The price action overall remains constructive though as the U.S. Dollar continues to remain weaker against most of its G-10 currencies. The geopolitical heat is definitely rising again slowly, and this should ensure that gold remains bids on any material dips in the early part of this week.
Gold has support at 1246, a double bottom and its 200-day moving average followed by 1240. Thursday’s high at 1265 is initial resistance followed by the 1272 region.
Original post
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.