Market analysis

Week 13 data: oil and gold before the NFP

By Antreas Themistokleous

26 March 2024

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This preview of weekly data looks at USOIL and XAUUSD, with upcoming economic data being the main market drivers for the near short-term outlook. The most important economic data for this week are:

Thursday

The US quarterly GDP growth rate is scheduled for Thursday at 12:30 PM GMT. Market participants expect the figure to be 3.2%, down from 4.9% in the previous quarter's reading. While this data pertains to the previous quarter and might already be priced in, any significant deviation could spark volatility in most pairs traded against the dollar.

Friday

The US core PCE price index for February is expected to decrease to 0.3% from the previous 0.4%. Accurate figures could put pressure on the Dollar, whereas a higher PCE reading might give the Dollar a minor boost.

Sunday

The NBS manufacturing PMI is anticipated at 01:30 AM GMT, with expectations for a slight increase to 49.9 points. Given its larger scale compared to Caixin's upcoming release, a correct forecast suggests slight improvement in state-owned firms' performance, yet still below the 50-point level indicating expansion. This might influence production-related instruments like oil, natural gas, and silver.

USOIL

Oil prices remained steady as investors assessed the impact of Russian refinery disruptions and a slightly weaker US dollar. Recent Ukrainian attacks on Russian refineries and production cuts in Russia have mixed effects on crude prices, potentially impacting global oil exports. Rising geopolitical tensions in the Middle East have also contributed to increased geopolitical premiums affecting oil prices.

Technically, the price is in a steady bullish trend, reacting at the support area of the 50% weekly Fibonacci retracement level. The 50-day moving average is well above the 100-day moving average, validating the bullish momentum in the market for crude oil. However, the Stochastic oscillator near extreme overbought levels hints at a possible correction. This correction could follow a retest of the previous high around the $82.50 price area before potentially retesting the $80.50 support. As long as the price doesn't break below the bullish trendline (blue line), the short-term outlook remains bullish.

Gold-Dollar

Gold prices rose due to a weaker dollar and anticipation of US inflation data, with new record highs expected by year-end. Traders are pricing in a 64% probability of the Fed cutting rates in June, providing strong support for gold prices from Chinese household demand and central bank purchases. Additionally, a decline in commercial traders' numbers suggests a potential short-term downturn in gold prices.

Technically, the price has found support at the 20-day moving average and has since corrected upwards. However, the all-time high in mid-March and the upper band of the Bollinger Bands pose strong resistance, which could push prices down in the coming sessions. If this scenario unfolds, the first area of possible support could be around $2,150, marked by psychological support, the 23.6% daily Fibonacci retracement level, and the mid-March price reaction area.


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


Author:

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.