- Commodity prices fall as dovish ECB stokes broad US Dollar rally
- US jobs data may boost Fed rate hike bets, triggering further losses
- Gold prices stuck at range support, crude oil prices at 1-month low
Commodity prices fell as the ECB-inspired EUR/USD drop echoed as broad-based US Dollar strength around the financial markets. The cross accounts for nearly a quarter of all FX market turnover, so it makes sense that the greenback's performance t here would have knock-on effects on its value overall. That hurt assets denominated in USD terms on global markets, including gold and crude oil .
The single currency whipsawed as the central bank delivered a much-anticipated monetary policy announcement but ultimately found its way lower, as expected . President Mario Draghi said QE will continue until officials see a "sustained adjustment" in the inflation path, adding that underlying price pressures are "subdued" . Tellingly, official inflation forecast s for next year were lowered.
From here, all eyes are on February's US jobs report . Survey data hints that wage inflation is likely to remain elevated, stoking Fed rate hike speculation and giving the Dollar a further lift. That may translate into de-facto pressure on the WTI benchmark once again. Gold might face outsized losses however as its anti-fiat and alternative store-of-value credentials turn into liabilities.
Learn what retail traders' gold buy and sell bets say about the price trend !
GOLD TECHNICAL ANALYSIS
Gold prices continue to mark time at familiar support in the 1312.36-16.50 area (range floor, 38.2% Fib retracement). Breaking this barrier on a daily closing basis sees the next downside threshold at 1301.19, the 50% level. Alternatively, a push above range resistance at 1341.04 exposes the 38.2% Fib expansion at 1352.40.
CRUDE OIL TECHNICAL ANALYSIS
Crude oil prices dropped to the lowest level in nearly a month, challenging the 50% Fibonacci expansion at 59.95. A daily close below this barrier exposes the 61.8% level at 58.94. Alternatively, a reversal back above the 38.2% Fib at 60.96 opens the door for another test of chart inflection point resistance at 62.62.
COMMODITY TRADING RESOURCES
- See our guide to learn about the long-term forces driving crude oil prices
- Having trouble with your strategy? Here's the #1 mistake that traders make
- Join a Trading Q&A webinar to answer your commodity market questions
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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