Weekly data: Oil and Gold

Antreas Themistokleous, Exness Market Analyst

This preview of weekly data looks at USOIL and XAUUSD where economic data coming up later this week are the main drivers in the markets for the near short term outlook.

This preview of weekly data looks at USOIL and XAUUSD where economic data coming up later this week are the main drivers in the markets for the near short-term outlook.

The most important economic data for this week are:


  1. Bank of Japan interest rate decision at 03:00 AM GMT. The market consensus is that the central bank will keep interest rates stable at -0.1% without any major surprises.
  2. Flash European GDP and inflation rate at 10:00 AM GMT. GDP growth results are expected to decline to 0.2% against the previous reading of 0.5%. At the same time, the inflation rate is broadly expected to decline to 3.2% against 4.3% in September.
  3. NBS manufacturing PMI at 01:30 AM GMT is expected to hold steady at 50.2 points. NBS is focusing more on large state-owned firms and is generally larger than the Caixin version. The publication, if its accurate, would mean that manufacturing at state-owned firms is expanding and could potentially impact production-related instruments like oil, silver, and copper.


4. Caixin manufacturing PMI at 01:45 AM GMT is expected to increase from 50.6 to 50.8 points. The Caixin survey focuses more on private and export-oriented companies and if the expectations are correct then it would mean that exports in China are expanding and could potentially have an effect on major production related assets like oil, natural gas and silver.
5. US manufacturing PMI at 02:00 PM GMT where the market expects the figure for the month of October to keep steady at 49 points.This means that the manufacturing sector in the States is still not expanding and might create some pressure against the Dollar.
6. FED interest rate decision at 06:00 PM GMT is broadly expected to keep steady at 5.5% with the probabilities of a cut being less than 4%. Participants are focussing closely on what the comments of the central bankers in the subsequent press conference indicate as to the future direction of monetary policy.


7. The Bank of England decides on their interest rate at 12:00 PM GMT. The general expectation is that the central bank will hold their rate stable at 5.25% but in the event that we witness a hike on the rate it could give some support to the quid in many of its pairs, especially against the US dollar whereas in the unlikely event of a cut it might have a negative effect on the British pound in the aftermath of the release.


8. Canadian unemployment rate at 12:30 PM GMT. The expectations for the month of October is for a slight increase of 0.1% reaching 5.6%.

9. US NFP & unemployment rate at 12:30 PM GMT. Unemployment rate is expected to hold steady at 3.8% while NFP expectations are for a decline to 188K against the previous figure of 336K. The figure has beaten the expectations in the 2 last publications and it is not unlikely for this to happen again and possibly see some support on the greenback.

USOIL, daily

Exness Oil1

Oil prices dropped $1 a barrel on Monday as investors await the outcome of the Federal Reserve policy meeting and China’s manufacturing data and the market is cautious due to concerns about an economic slowdown that could impact fuel demand. Despite the ongoing conflict in the Middle East, oil prices retreated as concerns over the potential for Israel’s ground offensive in the Gaza Strip to escalate into wider conflict eased.

On the technical side the price is trading in the dynamic area between the 50 and 100 day moving averages while the Stochastic oscillator is near its extreme oversold level. Currently the price is testing the support of the 100 day moving average and in combination with the oversold Stochastic it is possible to see a bounce to the upside in the near short term. If this is confirmed then the first area of technical resistance could potentially be faced around the $85 price area which consists of the psychological resistance of the round number and the 38.2% of the weekly Fibonacci retracement level.

Gold-dollar, daily

Exness Gold

Gold prices are trading around the key $2,000 level on Monday due to safe-haven demand amid escalating conflict in the Middle East. Investors are cautious ahead of the upcoming U.S. Federal Reserve policy meeting and the US job report on Friday which are broadly expected to create volatility to the majority of the instruments traded against the Dollar. . The Fed is expected to keep interest rates unchanged, but market participants will be focused on Chair Jerome Powell’s commentary in the subsequent press release. Strong economic data and concerns over the Middle East conflict are likely to keep gold prices supported with fueled-up volumes.

From the technical point of view, gold prices have found sufficient support exactly on the 38.2% of the weekly Fibonacci retracement level and continued to rally until the day of this report being written. Just before the US market opens gold seems to be losing some steam and moves slowly to the downside and at the same time the Stochastic oscillator has been in the extreme overbought level for the past 2 consecutive weeks possibly indicating that a correction in the following sessions might be a prevailing scenario. If the correction happens then the first area of possible support could be found around $1,975 which is made up of the 38.2% of the weekly Fibonacci retracement as well as the area of the latest reaction of the price.

Disclaimer: the opinions in this article are personal to the writer and do not reflect those of Exness or Finance Feeds.

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