Crude Oil Prices May Struggle if EIA Report Hints at US Output Gains
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Crude Oil Prices May Struggle if EIA Report Hints at US Output Gains

DailyFX.com -

Talking Points:

  • Crude oil prices may struggle despite risk-on trade dynamics on EIA report
  • Gold prices may edge down as yields rise but US Dollar weakness supportive
  • What are the forces driving long-term crude oil price trends? Find out here

A swell in risk appetite has proven support ive for crude oil prices. Futures tracking the FTSE 100 and S&P 500 equity benchmarks are pointing higher before London and New York come online, hinting the path of least resistance continues to favor the upside.

The monthly EIA Drilling Productivity Report may cap progress however if it suggests US producers are boosting output. Rig count data from Baker Hughes showed the number of operational extraction points hit a four-month high last week, extending a rebuild of capacity started in early November.

Meanwhile, g old prices might turn downward as the chipper mood weighs on bonds and pushes yields upward, undermining the appeal of non-interest-bearing assets. Continued US Dollar weakness might limit losses for the standby anti-fiat alternative however.

What do retail traders' bets suggest about gold price trends? Find out here !

GOLD TECHNICAL ANALYSIS - Gold prices put in a Shooting Star candlestick below resistance at 1342.49, the 38.2% Fibonacci expansion, hinting a move lower may be ahead. Negative RSI divergence bolsters the case for a downside scenario. A move back below the 23.6% Fib at 1329.45 exposes the January 10 low at 1308.38. Alternatively, a push above 1342.49 targets 1353.03 (trend line from July 2016, 50% expansion).

Chart created using TradingView

CRUDE OIL TECHNICAL ANALYSIS - Crude oil prices breached the 50% Fibonacci expansion at 64.32, seemingly clearing the way for a challenge of the 61.8% level at 66.33. The 76.4% Fib at 68.81 beckons beyond that. Alternatively, a turn back below 64.32 - now recast as support - paves the way for a retest of the 38.2% expansion at 62.31.

Chart created using TradingView

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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