Gold (XAU)
Key news events today
ISM Services PMI (2:00 pm GMT)
What can we expect from Gold today?
ISM Services PMI have been expanding for the past seven months and August’s estimate of 52.5 points to another month of growth, albeit at a slightly slower rate. Price pressures increased in the month of July and another stronger than expected reading for this category could function as a bullish catalyst for the DXY and thus have a negative impact on gold prices.
Technical
The XAU/USD chart currently displays a bearish overall momentum, indicating a potential downward trend in price movement.
There’s a likelihood of a bearish continuation towards the 1st support level at 1913.49, which is identified as an overlap support, particularly aligned with the 61.80% Fibonacci Retracement.
The 2nd support level at 1901.55 is also noted as an overlap support, and it aligns with the 78.60% Fibonacci Retracement, reinforcing its importance as a potential area of price support.
On the resistance side, the 1st resistance at 1931.97 is considered a pullback resistance, while the 2nd resistance at 1943.88 is marked as an overlap resistance. These levels may act as barriers to any potential bullish movements.
Oil
Key news events today
API Weekly Crude Oil Stock (8:30 pm GMT)
What can we expect from Oil today?
Crude prices spiked overnight as a surprise announcement by Saudi Arabia along with Russia to extend their respective production cuts until this December worried traders about potential shortages during peak winter demand. WTI oil hit $87.50 per barrel before pulling back slightly this morning. Another larger than expected drawdown in API stockpiles later today could act as an additional bullish catalyst for this commodity.
Technical
The WTI chart currently exhibits an overall bullish momentum, indicating an upward trend in its price movement. Within this context, there’s potential for the price to experience a bullish continuation towards the 1st resistance level at 87.15.
The 1st resistance level at 87.15 is identified as an overlap resistance that aligns with a confluence of Fibonacci levels i.e. the 161.80% extension and the 61.80% projection levels. Furthermore, the 2nd resistance level at 89.26 is also identified as an overlap resistance.
To the downside, the 1st support level at 84.06 is identified as a pullback support while the 2nd support level at 81.65 is identified as an overlap support.
It is also important to note that the Relative Strength Index (RSI) is displaying bearish divergence compared to the price. This divergence suggests the possibility of a reversal occurring soon, which should be considered when evaluating the overall bullish momentum.
