Weekly data: Price action on Gold and Oil following last week’s US job report

On technical analysis we can observe that the price is trading in a strong uptrend for the last month. It is trading outside the upper band of the Bollinger bands indicating high volatility while the current trading area is a strong resistance consisting of the round number of $1800 and also the last resistance area of the major swing in mid August.

With the Stochastic indicator in the overbought level we might expect some correction to the downside with some support around the $1770 which is just above the 78.6% of the Fibonacci retracement level.

Oil, daily

In the last week the price of oil has soared in fears that the Russian-Ukrainian war could damage supply. The EU ban on Russian crude oil is also starting to be in effect from the 5th of December while a price cap of $60 per barrel will also apply in the near future from the G7 and Australia. This cap essentially means that only Russian oil that was bought for less than a barrel will be allowed to be shipped using the EU and G7 tankers. Russia replied that it will not accept this cap and threatened to stop exporting oil to all countries that will adopt the price cap.

Being the second top producer of crude oil after Saudi Arabia, Russia can influence the price of the “black gold” greatly and have already diverted their European shipments to China, Turkey and India. OPEC meeting that was held on Sunday December 4th has agreed to stick to their original statement for output cuts that was decided and announced at their last meeting for a deduction of 2 million barrels per day in an effort to influence an increase in the price.

On the technical side the price of oil is currently trading at the area, just above the 38.2% of the daily Fibonacci retracement level. A further continuation to the upside could face some resistance around the .300 area which consists of the 50% of the Fibonacci and also an inside resistance area since mid October.

If the price fails to incline further and with Stochastic indicator in the overbought levels we might see some correction to the downside in the following days with the first area of support around the .200 area just below the 23.6% of the Fibonacci.