WTI
The WTI oil market has experienced a period of consolidation after registering gains in the last two sessions. As of the Asian session on Wednesday, the WTI oil price is hovering around $73.50. This comes on the back of a positive development in the American Petroleum Institute (API) Weekly Crude Oil Stock report, which indicated an improvement by recording a figure of 0.674 million barrels. This contrasts with the previous decline of 2.5 million barrels.
The slight pullback in oil prices suggests a cautious sentiment among traders, possibly due to uncertainties surrounding global economic conditions and geopolitical factors. The API report, reflecting a modest increase in crude oil stocks, might have contributed to this consolidation. Traders are likely monitoring additional data points and geopolitical events for further clues on the direction of oil prices.
Given the current scenario, traders may consider a watchful stance and closely monitor key support and resistance levels. A break above the recent consolidation could signal a potential bullish move, while a break below support levels might indicate a shift in sentiment towards the bearish side.
Entry Suggestion
Long Position: Consider entering a long position if WTI breaks above the recent consolidation and shows signs of upward momentum. Target key resistance levels with appropriate risk management strategies.
Short Position: If WTI breaks below support levels, a short position might be considered. However, closely monitor for confirmation and be aware of potential geopolitical developments that could impact oil prices.
EURUSD
The EURUSD pair has rebounded from the 2024 lows of 1.0720 to 1.0760 during the early Asian session on Wednesday. This recovery is attributed to the renewed selling bias in the US Dollar (USD). Investors are now eagerly awaiting the German Industrial Production data scheduled for release later in the day, with an estimated drop of 0.4% MoM in December.
The selling pressure on the USD could be influenced by various factors, including economic data releases, market sentiment, and the outlook for monetary policy. The German Industrial Production data is likely to play a crucial role in shaping the short-term direction of the EURUSD pair. A weaker-than-expected industrial production figure might lead to further USD weakness and contribute to the pair's upward movement.
Entry Suggestion
Long Position: If the German Industrial Production data surprises to the upside or meets expectations, consider entering a long position on the EURUSD pair. Target key resistance levels and closely monitor for any shifts in market sentiment.
Short Position: In the event of a significant deviation in the industrial production data or unexpected positive US economic news, a short position on the EURUSD pair might be considered. Utilize appropriate risk management measures and closely monitor for potential reversals.
XAUUSD
XAUUSD, or spot gold, experienced a rebound on Tuesday following a pullback in the U.S. dollar and Treasury yields. Traders are positioning themselves for remarks from several Federal Reserve officials throughout the week to gauge the likely pace of interest rate cuts in the coming months.
As of 01:45 p.m. ET on Wednesday, spot gold is trading at $2,035.89 per ounce, reflecting a 0.6% increase. This comes after hitting its lowest point since January 25 in the previous session. U.S. gold futures settled 0.4% higher at $2051.4.
The rebound in gold prices suggests that market participants are closely monitoring central bank communications and adjusting their positions accordingly. The pullback in the U.S. dollar and Treasury yields has likely contributed to the positive sentiment towards gold.
Entry Suggestion
Long Position: Consider entering a long position on XAUUSD if the Federal Reserve officials' remarks indicate a dovish stance, supporting the expectation of potential interest rate cuts. Look for confirmation of upward momentum and target key resistance levels.
Short Position: In the event of hawkish remarks from Federal Reserve officials or unexpected positive economic data, a short position on XAUUSD might be considered. Ensure proper risk management and monitor for potential reversals.
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Paraphrasing text from FXStreet, and Reuters all rights reserved by the original author.
