WTI
Oil prices faced downward pressure as investor focus shifted back to the demand outlook. Reports of higher producer prices in the U.S., the world's largest oil user, raised concerns about persistent inflation and the possibility of higher interest rates, potentially limiting fuel consumption growth.
As of 0440 GMT, Brent crude futures were down 61 cents, or 0.7%, at $82.86 a barrel. Meanwhile, the March contract for U.S. West Texas Intermediate (WTI) crude, expiring on Tuesday, dipped 41 cents, or 0.5%, to $78.78.
The current market sentiment suggests caution among investors, driven by fears of reduced fuel consumption due to potential interest rate hikes. Traders should closely monitor economic indicators and central bank communications for any signs influencing inflation and interest rate expectations.
Potential Entry Suggestions:
Given the current downtrend in oil prices, traders may consider short positions with caution, considering the approaching expiration of the WTI March contract. A break below key support levels could signal further downside. However, it is crucial to stay informed about any developments that could influence market sentiment.
XAUUSD
XAUUSD prices continued their recovery mode at the beginning of the week, benefitting from a weaker US Dollar and lower Treasury bond yields. The precious metal started the week on a positive note, with buyers extending the previous week's recovery.
Gold buyers now face the challenge of breaking above the 21-day Simple Moving Average (SMA) at $2,025. The Relative Strength Index (RSI) remains below the 50 level, indicating a potential struggle for upward momentum.
The upward trajectory in gold prices is currently driven by a broadly softer US Dollar, which is tracking lower alongside US Treasury bond yields. The mixed market sentiment is contributing to gold's appeal as a safe-haven asset.
Potential Entry Suggestions:
For gold traders, a break above the 21-day SMA at $2,025 could be a bullish signal. However, caution is advised as the RSI indicates a potential resistance level. Keep an eye on developments related to the US Dollar and Treasury bond yields, as any sudden shifts could impact gold prices.
AUDUSD
The Australian Dollar (AUD) maintained its four-day winning streak on Monday, supported by a rise in Australia's ASX 200 index, particularly in mining stocks. The US Dollar weakened after dovish comments from former Fed official James Bullard.
As of Monday, the AUDUSD pair traded near 0.6560, positioned above the immediate support at 0.6550. A break below this level could lead to a test of the nine-day Exponential Moving Average (EMA) at 0.6523, followed by the psychological support at 0.6500.
Potential Entry Suggestions:
Traders focusing on the AUDUSD pair should monitor the support levels closely. A break below 0.6550 might trigger further downside movements. On the contrary, sustained strength above current levels could signal a continuation of the winning streak. Stay attentive to economic indicators and any statements from central banks influencing the Australian Dollar and the US Dollar.
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Paraphrasing text from FXStreet, and Reuters all rights reserved by the original author.
