Buoyed by economic optimism
Investor optimism going into tomorrow’s US inflation report appears to be feeding through to the oil market, with Brent and WTI both up more than 2% on the day. It will be interesting to see if they can hold onto those gains considering how they’ve failed to do so over the last four days. Another failure to do so would make this recovery rally look very weak.
Perhaps that will also hang on the inflation data tomorrow, with another softer reading paving the way for fewer hikes and even cuts later in the year. That would be supportive of the economy and therefore demand, potentially boosting oil prices.
$2,000 in sight?
Gold looks to have entered into a holding pattern ahead of the inflation data after rallying strongly once more in the aftermath of the jobs report. The yellow metal has started the year really strongly, buoyed by lower yields and favourable data, and the CPI numbers tomorrow could be supportive on both of these fronts.
There is significant resistance above at the moment, between $1,880 and $1,920 but if it can overcome this on the back of the CPI data, it could gather further momentum with $2,000 then not far away. An underwhelming report could reinforce that resistance and even trigger a correction.
For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary.
His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News.
Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
