Weekly data: Oil and Gold price action before NFP

This article was submitted by Antreas Themistokleous, market analyst at Exness.

This preview of weekly data looks at USOIL and XAUUSD where both are making bullish corrections since the US Dollar Index is trading slightly lower in recent sessions.

The most important economic data for this week are:

  1. Australian and Chinese balance of trade tomorrow at 00:30 AM and 03:00 AM GMT respectively. Market consensus is for an increase of the trade surplus of A$0.25 Billion and $3.8 Billions respectively likely supporting the relevant currencies.
  2. Reserve Bank of Australia interest rate decision tomorrow at 03:30 AM GMT. The scenario of a single hike (0.25 bps) is the most possible while in the event of a double hike we might witness stronger support on the Aussie Dollar.
  3. FED chair Powell testimony tomorrow at 15:00 GMT. Investors and traders will be closely watching the comments from the FED chair in regards to inflation and interest rates.
  4. Canadian and American balance of trade on Wednesday at 13:30 GMT. Market expectations are for an increase of the trade deficit of around $2 Billion on the US figure while no significant change is expected on the Canadian figure.
  5. US job openings for January on Wednesday at 15:00 GMT. The consensus is for 10.6 Million while the previous release was 11.012 Million. This is a small percentage change and probably won’t affect the Dollar so much since the figure is for January and this might be already priced in.
  6. British monthly GDP on Friday at 07:00 AM GMT where the consensus is for a shift in the positive figure of 0.1% against the previous release of -0.5%. If this is confirmed then we might see some gains for the British quid at least in the short term.
  7. Canadian unemployment rate on Friday at 13:30 GMT. A slight increase of 0.1% is expected which might create some minor losses for the loonie.
  8. !!MOST IMPORTANT EVENT OF THE WEEK!! – US Job report on Friday at 13:30  GMT. The markets are expecting an addition of 200K jobs while the low unemployment figure in the states is not expected to change. This could create gains for the Dollar since the fears of recession could be eased after seeing one of the major figures coming from the US still looking strong.

USOIL, daily

Crude oil opened lower on Monday mainly due to China setting a lower-than-expected target for economic growth this year at around 5% “Premier Li Keqiang said on Sunday the foundation for stable growth in China needed to be consolidated, insufficient demand remained a pronounced problem, and the expectations of private investors and businesses were unstable.” Investors cautiously wait for the major publications coming from the States, especially the NFP later the same week. Hawkishness from the FED is not picking up just yet since the possibility of a single hike on the next meeting is currently just above 70% making the Dollar index to slightly decline boosting Crude oil’s price up overall in the last week.

On the technical side the price has recently broken above the resistances of the 38.2% of the daily Fibonacci retracement level, the 50 and 100 moving averages as well as the bearish symmetrical triangle formation that was in effect since mid November 2022. This major correction to the upside was somewhat “paused” (at the time of this report) after the concerns of investors mentioned above.

In the event of a continuation of the bullish momentum then we might expect some resistance around the $80,50 area which is the upper band of the Bollinger bands and slightly above the psychological resistance of the round number. If the opposite happens and the price resumes its overall bearish movement then the first level of support lies around $77,50 which consists of an area on the chart where there are the 50 and 100 moving averages as well as the upper boundary of the triangle.

Gold-dollar, daily

Past week’s economic data from the US came in softer especially for PMI boosting the price of the yellow metal. According to FedWatchTool from CME group, the market is discounting the possibility of a single hike on the next FED meeting on 22nd of March at more than 70% but the scenario of a double hike is silently gaining ground since it was around 9% one month ago and today is more than 27%. The NFP set to be published on the 10th of March is expected to create volatility on all USD pairs , gold included.

From the technical point of view the price is trading in a “dynamic area” which is the area between the 50 and the 100 moving average. While the Stochastic oscillator is in the overbought area we might witness a small correction to the downside while a better than expected figure on the NFP would reinforce the possibility of further losses for the commodity. The $1,830 area is considered a strong technical support for the price since it consists of the 20 and 100 moving averages, the 38.2% of the daily Fibonacci retracement level and also the psychological support of the round number.

On the other hand a continuation of the short term bullish movement could face some resistance around the $1,880 price area which is made up of a point on the chart where the 50 day moving average meets the 23.6% of the Fibonacci retracement making it a valid technical resistance level.

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Disclaimer: opinions are personal to the author and do not reflect the opinions of Exness or LeapRate.

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