Commodities turning bullish?
Posted by freeamfva on March 22nd, 2022
At the time of writing this, stocks are strong which doesn’t support the idea of going long in precious metals. However, DAX is trading near to resistance levels and therefore there’s always a risk that it sells off. That’s when precious metals could find some legs and start to move higher. There are indeed early signs of strength in Silver, USOIL and USNGAS so I will cover these markets today and provide you with targets and an alternative scenario. I will include target 1 (T1) and target 2 (T2) in this analysis so that you have an idea of how far the market would probably move. The target one is a high probability target while the next target is further away and therefore there’s a greater risk that the market doesn’t move that far. However, when risk is greater then also the reward is great too. Heads up for the FOMC Press Conference in the US session today. By reading further, you agree with our disclaimer at the end of this report and acknowledge that we do not provide investment advice.To get more news about tio market, you can visit wikifx.com official website.
XAGUSD has corrected quite a bit lower and could be ready to retrace some of the recent down move. This market, therefore, goes on my watchlist. I will give you the key technical levels now and a rough idea I want to see taking place in this market before I’m willing to consider a long trade. I will alert you in Telegram if I am at my desk at the time of this market making significant moves. XAGUSD could be a long candidate above 24.53 and a break above the 24.88 resistance would be short-term bullish. Look for a move to 25.04 (T1) if the bulls are willing to bid this market higher above 24.88 (always look for price action confirmation!). If the market rallies decisively above the 25.04 resistance, the market could move even higher but that’d probably take some weakness in equities markets. Alternative scenario: Bears push the market below the 24.53 support and a move to 24.25 could be in the cards.
USOIL is showing some signs of strength after retracing back to 50% Fibonacci level. A breakout from a bearish channel points to a reversal in the price of oil. On a break of the 96.74 resistance level, my T1 for oil is at 97.66 – 98.25 range and T2 at 100.80 – 101.30 range. These are not predictions on how far USOIL could rally but rather TA based estimations of probable moves. Alternative scenario: USOIL fails to attract buyers above the 96.74 key level and trades back down to 94 or so.
USNGAS is a market that for obvious reasons trades with oil to a certain degree. Now that USOIL is showing signs of strength USNGAS looks like it wants to follow the oil market. My T1 for USNGAS is at the 4.792 – 4.838 range on the condition that the market can break above the 4.726 resistance. The second target (T2) is at 4.910 – 4.930. An alternative scenario: Bears start hitting bids in oil and gas markets and USNGAS fails to challenge the 4.726 resistance successfully sending the market down to the 4.58 – 4.63 range.
Macro Drivers for the USD As the most followed, invested and traded markets for risky assets are priced in the USD it is helpful to understand what macroeconomic factors impact the other side of the equation, the USD. Whether we are trading EURUSD, XAUUSD or US equity CFDs the factors impacting the dollar, the nominator in the equation, have a significant role in the formation of all medium to long-term price action. The following table summarises the most important fundamentals.
