Two trades to watch: WTI crude oil, Gold

WTI crude oil consolidates ahead of EIA inventory data. Gold breaks over $1900, Fed speak in focus.

Gold 5

WTI consolidates ahead of inventory data 

Global growth optimism amid the reopening of the West is boosting the demand outlook. 

The softer tone surrounding the US Dollar which trades at a 4.5 month low also under pins oil  

Indirect Iran – US talks to revive the 2015 nuclear deal begin again this week. 

Bloomberg reports the WTI time spread (the June – July spread) is at the strongest level since May 2020. 

This spread serves as an indicator of the supply demand balance at main US storage hubs. Strength indicates inventories are tight as oil refineries ramp up output. 

EIA inventory data is due. 

Where next for WTI crude oil prices? 

WTI is consolidating around $66 after booking gains of 4% so far this week.  

Whilst it trades above its 50 & 100 sma on the 4 hour chart and the RSI is bullish, buyers remain optimistic of a move towards 66.60 and 67.00 May 18 high. 

On the downside, support cane be seen at 64.75 the 50 & 100 sma. A break below here could negate the recent uptrend and see the sellers gain traction towards 63.00 low May 3rd & 13th

Learn more about trading oil 

 

Gold breaks above 1900, Fed speak in focus  

Gold trades at multi month highs after outperforming on Tuesday. 

Weaker US treasury yields and the US Dollar trading at 4.5 month low helped Gold push above resistance at 1890. 

Fed speaker continue to dismiss inflation concerns indicating a supportive monetary policy for longer. 

The upbeat market mood could cap gains. 

The economic calendar is quiet today meaning that Fed speakers will be closely watched. 

Where next for Gold? 

Gold has broken above the descending trendline dating back to August. Gold has broken out above the ascending channel dating back to early April.  

The RSI is in overbought conditions which could mean that there is some consolidation before the next leg higher towards 1917 the high January 8, ahead of 1960 high January 7 as bulls moving towards the elusive 2000 level. 

It would take a move below 1870 to negate the current near term uptrend. 

Learn more about trading gold 


How to trade with FOREX.com

Follow these easy steps to start trading with FOREX.com today:

  1. Open a Forex.com account, or log-in if you’re already a customer.
  2. Search for the market you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels.
  4. Place the trade.


More from Trade Ideas

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.