Brent crude oil, gold and US natural gas fall on strong US dollar
Outlook on Brent crude oil, gold and US natural gas as US dollar rallies amid global recession fears and Russian missile attacks on Ukraine.
Brent crude oil in consolidation mode
Brent crude oil’s rise from its $82.55 September low to last week’s $98.00 high is taking a breather amid a strong US dollar and weakening demand outlook.
This comes on the back of global recession fears as the IMF and World Bank warned of a slowdown.
The $95.19 mid-September high and 55-day simple moving average (SMA) at $93.97 are likely to be revisited with the latter perhaps acting as support. Further down sits major support at $92.53 to $91.08, made up of the mid-July and mid-August lows and the 21 September high.
Minor resistance can be spotted at the early September high at $96.66 with further resistance seen at last week’s $98.00 high, a rise above which would push the 200-day SMA at $100.99 to the fore.
Gold dips on strong US dollar
Gold keeled over from its $1,729 early October high as the US dollar gained strength on the back of heightened tensions between Russia and Ukraine.
The price of gold slid back and after four consecutive down days reached its breached upper downtrend channel resistance line, which, because of inverse polarity, is now acting as a support line at $1,665.
Slightly below it, further minor support can be found at the $1,660 3 October low, from where the last impulsive move to the upside began. Further down lies the $1,655 mid-September low.
Resistance remains to be seen between the July and early September lows at $1,681 to $1,689.
US natural gas futures flirt with 200-day SMA
US natural gas futures revisit the 200-day SMA at $6.701 on weaker demand as global recession fears once again rear their head.
The front month futures contract already tested and then bounced off its 200-day SMA last week when it dropped to a 2 ½ month low at $6.370 before recovering.
After three consecutive days of falling prices, the odds look high for the current early October low at $6.370 to be retested, a fall through which would engage the 12 July $5.955 low as well as the July low at $5.330.
Resistance comes in between the 27 and 29 September as well as the current October highs at $7.147 to $7.260.
This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
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