I woke up in the morning just to see the headlines “Oil Drops to 21-Year Low With Storage Filling as Demand Shrivels”. Ever-since OPEC and its allies agreeing to cut production by 9.7 million barrels per day, Crude oil continuing its downward journey.
In the midst of ongoing trade war tensions gold, this week had captured the psychological mark 1500 USD and trading around the overhead resistance zone 1520-1525 levels. Gold rallied and broken the 2014 year high from bottoming at $1,045 in December of 2015
In May, the National Oceanic and Atmospheric Administration predicted a near-normal 2019 hurricane season, which runs from June 1 to November 30. But, the season got off to an early start with the short-lived sub-tropical storm Andrea on May 20.
If financial markets were styles of music, equities, especially the most stable Big Board stocks, are like great classical compositions: They’re made up of consistent, steady tempos you could listen to all day with the occasional booming or crashing note.
WTIC Crude is in a clear downtrend since the start of Oct 2018. November month alone it lost more than -21%. Currently crude is trading above the psyhogical support zone 50 which is expected to provide better support zone and short term buying is expected to happen in this zone as long as 50 is protected on the downside.
Gold price action remains muted despite the stock market crashing, global events like trade war, syrian attack. Its been trading in a very compressed range 1300-1350 range since the start of year 2018. Last 4 trading sessions price is making higher high and higher lows which shows the confidence of the players. Price maintains above 200MA since 2018.
There’s a widespread assumption that supply and demand drive oil prices. Almost all economists base their oil forecasts entirely on this premise, and so do many speculators.
If the oil industry ramps up production and increases supply, economists expect a drop in oil prices. If production decreases, or some other factors hint at supply constraints, they anticipate a rise in oil’s price.
Since last two years Gold is currently trading in a very broader range 200 point range (1150-1350 on weekly timeframe). Trading sentiment for this week turned to positive which indicates bullish medium term bias. On the Daily Scale Gold is trading in a very tight range between 1265-1285 range and sentiment turned positive on the daily scale as well.
Crude Oil is trading in a very tight range. Very short term trading sentiment turns positive and trend line resistance comes around 49.2 reference where more crowded stops are visible in that reference point. And few more stops are visible around 50.2 zone.
Gold had done a short term trend reversal from the recent swing low of 1251. Trading Sentiment holds positive on both daily and weekly timeframe. Current surge towards 1280 reference brings a possibility of test towards the 1295-1300 band where gold got resisted twice in the same reference.
MCX Copper June futures on last Friday slipped down below 200MA on both daily(366.8) and hourly(366.7) charts. However around the market close, managed to close above 200MA on both the timeframes it is a short term bullish setup as responsive buyers shown support on Friday low around the 361 mark.
Both Short term (Daily Sentiment) and Very Short term sentiment (Hourly) in MCX Crude holds down. Sideways action is expected with a possible test towards 3170. However any sustainable move coming above 3213 indicates resume of short term trend up that is more likely to keep the trend strong in the very short term.