Crude Oil Prices May Bounce As Overall Market Mood Brightens
Crude oil prices sank amid broad-based risk aversion, with the WTI contract tracking US stock index futures downward. Gold prices struggled for direction, as expected. Souring sentiment drove down bond yields and offered a degree but the metal made little headway. That hardly seems surprising considering worries about the pace of Fed interest rate hikes appear to be a leading headwind for risk appetite.
CRUDE OIL MAY RISE AS GOLD RETREATS IN RISK-ON TRADE
From here, a lull in top-tier scheduled event risk may open the way for corrective price action ahead of the week-end. Futures tracking the bellwether FTSE 100 and S&P 500 stock indexes are pointing tellingly higher before London and New York come online, hinting at risk recovery ahead. That might see crude recover alongside shares while gold backtracks. Lasting follow-through on such moves is unlikely, however.
GOLD TECHNICAL ANALYSIS
Gold prices are noncommittal below resistance in the 1235.24-41.64 area but negative RSI divergence continues to warn of a downturn ahead. A daily close below resistance-turned-supportin the 1211.05-14.30 zone exposes the September 28 low at 1180.86. Alternatively, a turn above 1241.64 opens the door for a test of the 1260.80-66.44 region next.
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CRUDE OIL TECHNICAL ANALYSIS
Crude oil prices are testing support guiding the uptrend since early February, now in the 66.66-68.53 area. A daily close below that paves the way to challenge the support shelf in the 64.26-45 zone. Alternatively, a move back above the 70.05-26 region clears the way for a retest of trend line support-turned-resistance at 71.51. The longer-term chart setup suggests a longer-term top may be forming.
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