President Trump was impeached by the US Congress and if found guilty by the Senate would lose his ability to serve ever again in Presidential office. This coincides with Reuters reporting that Facebook has detected a rise in violent rhetoric that is tied to US Presidential inauguration. US stocks gained back the ground lost two days earlier confirming the uptrend is still continuing. Funds flowed into real estate and utility sectors and away from industrials, materials and energy sector shares. This suggests that institutional investors are valuing safety over growth. However, it could at the same time reflect the softness in oil prices seen in yesterday’s trading. Crude had a red day even though Chinese data has been supportive of future demand and US stockpiles for crude oil have been diminishing for several weeks now. The reason might well be worries related to the high number of Covid19 cases. Corrections are to be expected after the price of oil has been rallying strongly for the last 10 days or so. Also, the rate of change in diminishing oil inventories seems to be slowing down. This indicates that supply relative to demand is increasing and could further soften the bids. US CPI numbers provided no surprises yesterday as the numbers were in line with the expectations. Core CPI was confirmed at 0.1% and the headline number at 0.4%. This understandably caused no market reactions in currency markets. Today’s main risk event is the Fed Chair Jeremy Powell’s speech. See our economic calendar for times and details. By reading further you agree with our disclaimer at the bottom of this page and acknowledge that we do not provide investment advice.

The price of crude oil traded lower yesterday and moved below the rising channel it had been trading in. This is bearish but doesn’t yet mean that the trend has reversed. A decisive violation of the 52.50 support level would confirm the upward trend was no longer in force. This support coincides with 50-period SMA and 23.6% Fibonacci retracement isn’t too far either (at 52.33). This makes the 52.33 to 52.50 zone a technical confluence area and the recent bounce from the zone suggests that traders are trying to rally the price to see if there was enough demand at higher levels to continue to the trend. Other key price levels are 51.50, 53.65 and 53.90.

We said in yesterday’s analysis that gold was trading right below yesterday’s high which increases the risk of the market correcting lower before it can continue higher. This is what happened and the price of gold dropped outside the bullish channel but found buyers around 1829. Gold is trading sideways between 1829 and 1863.80 levels. Other key support and resistance levels in gold are 1816.90, 1836.20, 1900.80, 1927.70 and 1959.30. Open a VIP Black account with us. There are no per trade execution or monthly fees on our VIP Black accounts.

Recent macroeconomic data releases

  • US Average Hourly Earnings 0.2% expected
  • US Non-Farm Employment Change 60K expected
  • US Unemployment Rate 6.8% expected
  • Canadian Employment Change -62.5, -32.5K expected
  • Canadian Unemployment Rate 8.6%, 8.7% expected
  • US Average Hourly Earnings 0.8%, 0.2% expected
  • US Non-Farm Employment Change -140K, 60K expected
  • US Unemployment Rate 6.7%, 6.8% expected
  • US CPI 0.4% expected
  • US Core CPI 0.1% expected

Important macroeconomic data releases this week

  • US Fed Chair Powell Speaks

You may access the times and dates in the economic calendar here.

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Trade Safe!

Janne Muta
Chief Market Analyst
TIOmarkets.com

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