Technical analysis

Week 39 data: Oil and Gold

By Antreas Themistokleous

26 September 2023

Let’s first summarise the most important economic data for this week. If you are trading gold or oil this week, these are fundamentals that can affect technical forecasts.

US durable goods orders on Wednesday at 12:30 PM GMT. 

The data for the month of August are expected to increase by almost 5%. Durable goods orders are a leading indicator of manufacturing activity,  if the expectations are confirmed, there might be some minor support for the dollar.

Preliminary German inflation rate on Thursday at 12:00 PM GMT. 

The market consensus for the month of September is for a decline on the figure of around 1.5% reaching 4.6%. If this is broadly accurate, then it could most probably influence the European inflation figure on the following day.

US GDP growth rate on Thursday at 12:30 PM GMT. 

Market participants are expecting the figure to come out at 2.2% over 2% of the previous reading for the quarter. If this is confirmed then we might see some short-term support on the dollar against its pairs.

Flash European inflation rate on Thursday at 09:00 AM GMT. 

The rate for the month of September is expected to decline to 4.5% down from the previous reading of 5.2%. This could affect negatively the Euro against its pairs at least in the short term.

US core PCE on Thursday at 12:30 PM GMT. 

The market is expecting the US core PCE figure to remain stable at 0.2%. Unexpected data is seen at the time of publication would most probably create volatility in the majority of the dollar pairs.

USOIL, daily

Oil prices rose on Monday as investors were optimistic about a tighter supply outlook following a temporary ban on fuel exports issued by Moscow. The market is still cautious about potential rate hikes by the Fed that could affect demand, however, there was a three-week price rally thanks to Saudi Arabia and Russia extending production cuts until the end of the year. Moscow's temporary ban on gasoline and diesel exports to most countries added to concerns about low product supply, particularly for heating oil during the winter season.

In the United States, the number of operating oil rigs decreased to 507, the lowest since February 2022 while expectations of positive economic data from China, the largest crude importer, also boosted sentiment. However, oil prices may face technical resistance at the November 2022 highs at around $93.

On the technical side, the price has found sufficient resistance on the upper Bollinger band and has since corrected to the downside with some signs of bullish momentum building up in the most recent sessions. The price is trading above all moving averages and the bullish trend line, indicating the bullish momentum is still ongoing. In addition, the 50-day moving average is trading above the 100-day moving average further validating the bullish movement. 

In any case, the price area of $93 is the major technical resistance level consisting of 50% of the weekly Fibonacci retracement level as well as the previous high of November 2022. In the event that the price continues on the bearish correction move, then there might be strong support around $86, which touches the 38.2% level of the weekly Fibonacci retracement and the lower Bollinger band. That level is also just above the bullish trend line.   

Gold-dollar, daily

Gold prices remained stable on Monday as investors analyzed the US Federal Reserve's decision to signal potential future interest rate hikes. The lack of demand for gold is evident in the falling holdings of global gold exchange-traded funds, while higher interest rates and yields are putting pressure on the precious metal.

The dollar is at a six-month high, and 10-year Treasury yields are near a 16-year peak. Investors are also awaiting the personal consumption expenditures price index on Friday and monitoring the spending bill negotiations in Washington, which could result in a government shutdown if there is no decision made by September 30.

From a technical point of view, gold prices have corrected to the downside in recent sessions after finding sufficient resistance on the 100-day moving average and the bearish trend line. The faster moving average (50-day) is trading below the slower one (100-day), indicating that the overall bearish momentum is still valid. Currently, the price is testing the resistance of the 38.2% level of the weekly Fibonacci retracement and the support of the 50-day moving average. 

US data coming up on Thursday and Friday are expected to create volatility on the majority of the dollar pairs, so any trading initiated on gold this week needs to take into account money management rules and risk assessment before opening the trades.

This is not investment advice. Past performance is not an indication of future results. Your capital is at risk, please trade responsibly.


Antreas Themistokleous
Antreas Themistokleous

Antreas Themistokleous is a trading specialist in Exness. He is a Certified Financial Technician since 2018. As a member of the Society of Technical Analysts, Antreas is implementing advanced use of indicators and patterns to conclude in an action plan for different trading strategies.

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