In today’s Market Outlook, let’s take a look at Forex Trading on WTI, Brent Crude Oil, the NASDAQ, the Dow Jones Industrial Average, Gold, XAUUSD, and Silver XAGUSD.
As a matter of course, we watch price action on gold and silver, and they are both following similar paths.
Price broke out of a downtrend, rose, pulled back, and is heading up again.
The stochastic oscillator has crossed and looks like it will be heading back up soon, even before it hits the lower limit.
So, why the upturn?
Firstly, a weaker USD has the price of XAUUSD and XAGUSD rising as a normal balance in the pairs.
Secondly, the possibility of rate cuts by the Fed seems to be back on the table, so the move from USD to gold is normal in this case.
Thirdly, the geopolitical uncertainty of many global issues, especially the Iran war, has investors looking for safe havens.
Uncertainty over inflation and sovereign debt has investors and central banks continuing their investment in gold.
And, the global rise of tech industries has increased the demand for precious metals used in production, hence, another reason for the rise in silver.
If we look at the big technical picture of gold on the daily chart, we see price action breaking out of this bullish symmetrical pennant.
Key levels above include $4,870, $5,000 and, of course, the all-time highs around $5,600.
We see a similar picture on the daily chart of silver.
Getting back to the Fed, USD, and Interest rates, watch out for today’s Non-Farm Payrolls and next Tuesday’s CPI, which will be huge data drivers for any US Federal Reserve decision on interest rates.
The calendar also includes the US Senate Fed Chair Nomination Vote of Kevin Warsh.
We will go into more details in next Tuesday’s video.
At the moment, the consensus is that this will weaken the USD and be favourable to equities and Gold.
Let’s see.
As we mentioned last time, the Dow Jones Industrial Average is catching up to the other indices, but the NASDAQ is outperforming all of them due to the investment in tech, as we mentioned earlier.
Of course, we have to look at oil, and we see the continuing rollercoaster ride of on again, off again ceasefires and the vast confusion of the status of the Strait of Hormuz.
Basically, for traders, when there is good news, whether it is true or not, price action on oil falls.
The contrary is true with bad news, and the price of oil rises.
Just be careful with your risk management.
Oh, by the way, the WTI/Brent spread is down to less than $9, as it was $12 earlier in the week.
That’s all for now.
CFDs and FX are leveraged products, and your capital may be at risk.
