Key economic data to monitor on Thursday, March 13th: 15:00 UK January 3-Month GDP MoM 15:00 UK January Manufacturing Production MoM 15:00 UK January Goods Trade Balance (Seasonally Adjusted) 15:00 UK January Industrial Production MoM 15:45 France February CPI MoM (Final) 18:00 Eurozone January Industrial Production MoM 20:30 Canada February Employment Change 20:30 US January Core PCE Price Index YoY 20:30 US January Personal Spending MoM 20:30 US Q4 Real GDP Annualized QoQ (Revised) 20:30 US January Core PCE Price Index MoM 20:30 US January Durable Goods Orders MoM 22:00 US January JOLTs Job Openings 22:00 US March 1-Year Inflation Expectations (Preliminary) 22:00 US March Michigan Consumer Sentiment Index (Preliminary)
Gold experienced volatility yesterday, initially consolidating before facing resistance around 5190 and subsequently undergoing a significant corrective decline. The price broke below the daily moving average band, reaching a low near 5055 during the late session, and closed with a bearish candlestick that decisively penetrated the daily moving average support. From a daily chart perspective, the downward trend in gold was anticipated. Fundamentally, following the outbreak of tensions in the Middle East, market liquidity has shown a stronger preference for the US dollar and crude oil, leading to a reduction in gold's safe-haven appeal. Technically, the prolonged period of elevated prices had accumulated substantial correction risks. The recent formation of a "downward continuation" pattern further signaled a high probability of a market adjustment. However, the extended consolidation over nearly seven trading sessions had introduced significant short-term uncertainty. Last night's break below the daily moving average band confirms the downward continuation pattern, substantially increasing the likelihood of further declines. For today, resistance is expected near the 5130-50 moving average band. As long as the price remains below this zone, the short-term structure suggests a downward bias, with potential for a retest of 5000, and possibly even the lower boundary of the daily range near 4920-00.
On the hourly chart, gold initially rebounded to the 5180-90 area yesterday. After encountering resistance and consolidating in this zone, downward momentum was unleashed during the evening session, driving the price directly down to the 5055 level. Although a minor rebound has occurred, the hourly chart indicates a established downtrend. Immediate short-term resistance is situated around 5125-30, followed by the hourly trendline resistance near 5160. Technically, the market may exhibit weak, consolidative behavior today. Whether further downside extension occurs may depend on fundamental catalysts, where an absence of positive news could be interpreted negatively. Initial support on the hourly chart is seen around the 5060-50 trendline. A breach below this level could lead to a test of the key 5000 psychological level.
Trading strategy: The primary bias remains bearish. Consider initiating light short positions if gold rallies to 5130-35. If the price advances to 5150, add a small short position, with stop-losses set above 5160. For those who entered short positions near 5170-90 yesterday, consider partial profit-taking while holding the remainder with appropriate stop-loss protection.
Crude oil traded higher yesterday after a period of consolidation, retracing as expected to the 89-88 zone before rebounding. The price advanced during the evening session, reaching a high near 98, and closed with a strong bullish candlestick. The anticipated rise in US crude was driven not only by technical factors but predominantly by fundamental developments. Statements from Iran's new leadership indicating a continued blockade of the Strait of Hormuz have intensified market concerns about prolonged supply disruptions, an outcome that was largely expected. Given the ongoing Middle East tensions, crude oil remains highly sensitive to geopolitical developments, prone to sharp rallies on any significant news. Until there is a definitive de-escalation in the region, maintaining a medium-term bullish outlook is advisable, while avoiding speculative short positions.
On the hourly chart, moving averages crossed upwards yesterday, and the price structure remains above the moving average band, indicating a well-preserved bullish trend. While a intraday pullback is possible, its magnitude is expected to be limited. Key support to watch for a pullback is near 94.5. If a larger correction occurs, potentially reaching the 93-91 area, it should not persist below 93 for an extended period; otherwise, future price advances would become more heavily reliant on fundamental catalysts.
Trading strategy: Maintain a bullish outlook for US crude today. Existing long positions from yesterday can be partially reduced while retaining the remainder as medium-term holdings. Aggressive traders might consider initiating short-term long positions on a pullback to the 93-92.9 area, with stop-losses placed below 92. Initial profit targets are set in the 95-96 zone, where partial closing and stop-loss adjustment to breakeven is recommended. The remaining position can be held as a swing trade. If an unexpectedly deep correction occurs, monitor the 91 area closely to assess potential re-entry points for long positions. Specific strategies may require adjustments based on real-time market conditions.
Comments