For two days in a row, the price of gold is trying to recover. The rebound gains did not exceed the resistance level of 1756 dollars an ounce, before the price of XAU/USD settled around the level of 1751 dollars an ounce in the beginning of trading today, Thursday. Attempts to recover the gold price were halted by the strength of the US dollar and with investors’ focus turned to the global central banks event in Jackson Hole to get more clues on interest rate hike plans.

The US dollar rose 0.3%, making gold more expensive for overseas buyers.

While a stronger dollar is hurting gold, the market is relatively calm. Commenting on this, Bob Haberkorn, chief market analyst at RGO Futures, said metal traders are waiting to see what comes out of the Jackson Hole meeting and want to know more about the Fed’s rate hike path. Market participants await US Federal Reserve Chairman Jerome Powell’s speech at the Jackson Hole Economic Policy Symposium on Friday. The speech may shed some light on the path of Fed monetary tightening.

Amid high interest rates, gold tends to underperform because it does not generate any interest. In general, the price of gold is rising due to the decline in the dollar after the weak US data.

Investors will also focus on the second estimate of US GDP for the second quarter and consumer spending data for July which is due for release later this week.

Spot silver was down 1% to $18.97 an ounce. Commenting on the performance, Carlo Alberto de Casa, analyst at Kinesis Money said, “Silver’s price performance has been negative so far in 2022… A combination of negative factors, including fear of recession, rising interest rates and a strong dollar, have severely impacted the price of the industrial metal.”

XAU/USD Gold Price Analysis Today

• There is no change in my technical view for the performance of the XAU/USD gold price.
• The trend is facing downward pressures, and the direction will not change to an upward trend without stabilizing above the psychological resistance of 1800 dollars an ounce.
• I still see that the price of gold may move in narrow ranges and tighten performance until the reaction to the most important event for the markets this week, the statements of US Central Bank Governor Jerome Powell in his Jackson Hole seminar.

I still prefer buying gold from every bearish level and the closest support levels for gold are currently 1742 and 1725 dollars, respectively. The XAU/USD gold price will be affected today by the level of the US dollar and the extent to which investors take risks or not, as well as the reaction from the announcement of the growth of the US economy and the number of US weekly jobless claims.

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Rallies will more likely than not offer selling opportunities.

The West Texas Intermediate Crude Oil market has been very negative for a while, and it makes a certain amount of sense that we would see an attempt to turn things background. After all, the market won’t go in one direction forever, and it should be noted that quite a few crosswinds are blowing at the same time.

One of the big negatives out there is the fact that the world economy seems to be slowing down, therefore it should drive down the demand for crude oil. Even with the Russian supply being diverted, the reality is that the market is still trying to price in the fact that demand may fall off a cliff. If this is going to be the case, it’s obvious that the price needs to come back in. The question is whether or not the market has priced everything in so far. That remains to be seen, but we are clearly below the 200 Day EMA, and now below the $90 level.

Crude Oil Forecast

If we break down below the lows of the last couple of days, it’s very likely that this market could drop to the $80 level. Any rally now will struggle to continue going higher, at least not without the fundamentals changing. A bit of a rally from here does make a certain amount of sense though, because if no other reason than the fact that the market has been selling off for quite some time. Remember, markets never go in one direction forever, so it does make a certain amount of sense that we would see an attempt to recover. It looks as if oil is going to continue to struggle not only based on the potential lack of demand, but also the fact that the Iranians are apparently making concessions in order to sell in the global markets as well. If Iran starts to pump crude oil into the global supply chain, that obviously brings more supply and, thereby drives prices down.

• If we were to break above the $100 level, that could kick off the next bullish run in this market.
• It would take quite a bit of momentum shifting in order to make that a reality.
• Rallies will more likely than not offer selling opportunities.

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I will be looking for signs of exhaustion to jump on.

• The West Texas Intermediate Crude Oil market has rallied a bit, but at this point, it looks to me as if we are heading close to a major resistance region.
• The 200 Day EMA sits just above, so a lot of people are going to be paying close attention to this area.
• As we head into the weekend, it will be interesting to see whether or not the market participants are going to be willing to hang on to crude oil over the weekend.

It’s possible that we go higher, perhaps reaching to the $100 level, but at this point, it’s likely that the 50 Day EMA is going to go even lower. The $104 level is where it sits right now, and I do think that we are running much lower. Any sign of exhaustion will more likely than not be jumped on, especially as there are concerns about the global economy, as a slowdown will almost certainly drive down the value of crude oil because demand will fall.

The size of the candlestick is nice, and it does suggest that we have a little further to go. However, it’s where we close at the end of the day on Friday that will tell us more of the story. Even if we do rally from here, it’s really not until we break above the 50 Day EMA that you can start talking about the positivity of the market, because, for the most part, we are still in a very negative trend and channel. The US dollar strengthening of course will work against the value of crude oil as well most of the time, so you can pay close attention to that correlation also.

What’s interesting is that the natural gas storage numbers during the day came out higher than anticipated, suggesting that perhaps demand for energy is dropping. Because of this, it’ll be interesting to see how this plays out, but in the short term, it looks like the oil market is willing to ignore that. Natural gas has been outrageously expensive over the last several months, so that was part of the reason perhaps why oil has fought its way back up, but I think it’s probably only a matter of time before the short-sellers come back. I will be looking for signs of exhaustion to jump on.

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The only thing that can save the euro at the moment is going to be the Fed loosening monetary policy, or the ECB deciding to tighten it. 

• The euro initially plunged on Friday but then turned around to show signs of life again.
• The pair formed a hammer, a bullish candlestick which shows a potential reversal coming.
• This reversal is going to be short-lived, and I think it only extends for a move to the 1.04 level at best.
• The 1.04 level has been important for several weeks previously, and now that we have busted through it, it looks like the “market memory” could come into the picture and offer resistance.

Breaking Through the Friday Candlestick

The alternate scenario is that we simply break through the candlestick on Friday which is a real possibility as well because one would have to think that a certain amount of the bullish pressure in this pair was probably short-covering heading into the weekend. If that’s the case, then parity is all but assured. I believe that we are going to parity given enough time anyway, but I’m the first to admit that we got here much quicker than I anticipated. The destruction of the euro has been quite impressive.

If we can break down below parity, and at this point, I don’t know any reason why we can’t, it’s likely that we will see the euro enter an even deeper spiral lower, and it could become a major trend waiting to play out all the way down to the 0.85 level. Having said that, let’s not get too far ahead of ourselves because it is at these extremes that markets do tend to find some type of reason to turn around. After all, there are already people in New York clamoring for the Federal Reserve to start loosening monetary policy again, and if they were to do that it would change the entire dynamic of this currency pair.

The only thing that can save the euro at the moment is going to be the Fed loosening monetary policy, or the ECB deciding to tighten it. Yes, they will probably have a couple of 25 basis point rate hikes this fall, but realistically that’s about all they can do as the European economy is so fragile, and of course they have issues with energy production, not exactly a bullish thesis for the region.

The US dollar will probably continue to strengthen.

The British pound initially slid against the US dollar Friday but has recovered quite nicely as you can see on the chart. The resulting candle is a hammer, suggesting that we may see a bit of a bounce in the short term. That being said, I would consider this more or less a relief rally than anything else. I suspect that the 1.22 level offers a bit of resistance above, as it has been both support and resistance recently, suggesting that there should be a significant amount of “market memory” in that area.

• While the market may rally for the next day or two, I will be looking for signs of weakness that I can start shorting again.
• I do not believe that this is the end of the trend, just that we had gotten a bit overdone.
• The 50-day EMA sits at the 1.2350 level and is sloping lower, offering a significant amount of dynamic resistance that we will have to pay close attention to.

If we were to break above there, then it’s likely that we could see even more momentum to reach the 1.26 level. At that point, you have to start to take a trend reversal as being a real threat.

Breaking Down from Last Week

The size of the candlestick is not overly impressive, because this is essentially a market that’s just hanging around the 1.20 level. If we were to break down below the lows of the week, that opens up fresh selling, but quite frankly I think a bounce is healthy because it gives you an opportunity to pick up “cheap US dollars.” Remember, you are looking at a relative value play here, so the US dollar is the desired currency, but if you can get it at a better price that’s always what you want to do.

It will break down below the lows last week, then I think we start to focus on the 1.18 level, and then eventually the 1.15 level where I would anticipate another big fight. We are at relatively low extremes at the moment, but this is a market that has to deal with rising interest rates in America, recessionary concerns around the world, and quite frankly just a lot of general angst, meaning that the US dollar will probably continue to strengthen.

I’m looking for signs of exhaustion that I can jump on because I still believe that the DAX falls over the longer term.

The DAX has rallied a bit during the trading session on Thursday as we continue to see signs of life. That being said, the €13,000 level above could offer a little bit of resistance, as it was the previous support level. If we show any signs of exhaustion near the €13,000 level, then I believe that the DAX will drop rather significantly. At that point, the market is likely to test the lows again near the €12,500 level. It will break down below there, then it’s possible that the overall downtrend continues.

However, the market has recently formed a bit of a “double bottom”, so that might be worth paying attention to as well. That’s also why breaking down below the €12,500 level is such a negative turn of events, opening up quite a bit of selling pressure. That being said, the market is dropping overall, so I still think there is plenty of resistance above. Furthermore, you also have to keep in mind that the DAX is going to suffer at the hands of the German economy in general, which is dropping. Ultimately, we have to worry about things like energy in Germany and other parts of the EU, so it’s very likely that we would see a lot of negativity out there to push the market lower.

However, if we break above the €13,000 level, it’s possible that we could go looking to the 50 Day EMA. The €13,500 level is an area where a lot of attention will be paid as well, as the 50 Day EMA is reaching toward that area. If this era gets broken to the upside, then we can start to talk about a change in trend. At this point, I just don’t know whether or not that can happen, due to the fact that although the ECB cannot get as tight as once thought, the reality is that the economy is going to be in shambles unless we can figure out the energy situation in the European Union, and as we head toward winter, things are going to get really ugly. At this junction, I’m looking for signs of exhaustion that I can jump on because I still believe that the DAX falls over the longer term. However, I am also aware of the fact that there are a few areas above that if we break through, it could change things.

This is a market that I think continues to capture a lot of headlines if nothing else.

Bitcoin rallied a bit on Tuesday as we continue to see a lot of noisy behavior. However, this is a market that is very negative overall, so I do think that it’s only a matter of time before the downward pressure picks back up and sends Bitcoin below the $20,000 level. Over the weekend, the market had reached down to the 17,500 level before bouncing, and it makes quite a bit of sense that we would see that level defended again. However, if we cannot defend that level, that would be a horrible situation, and almost certainly would open up Bitcoin for a move down to the $15,000 level.

On the other hand, if the market were to turn around and break above the $22,500 level, then it’s possible that we could go higher, perhaps reaching to the 50-day EMA which is closer to the $28,000 level. That would of course be a very positive move, but I think there’s enough noise there to keep Bitcoin down. After all, it’s been in a downtrend for quite some time, and it’s going to take a lot for this market to change its overall attitude.

The $30,000 level is a major area worth paying attention to, as we have been very noisy in that area, so I think a certain amount of “market memory” could come into the picture. In fact, it’s not until we break above the $32,500 level that I would consider recovery in this market. That being said, this is a market that is going to continue to see a lot of volatility, which typically is not good for asset prices. After all, the market is going to continue to see more downward pressure than anything else, especially if the US dollar takes off again. The market has been in a downtrend for quite some time, and nothing has changed from a fundamental standpoint to make this suddenly something that I want to be buying. Crypto in general is in trouble, as risk appetite has been absolutely decimated. That being said, you do need to keep an eye on Bitcoin, because it will lead the rest of crypto, as it leads the way going forward. Nonetheless, this is a market that I think continues to capture a lot of headlines if nothing else.

Oil markets look very bullish, so it is possible that the Norwegian krone may put up a bit more of a fight against the greenback than some of the other currencies out there. 

The US dollar rallied a bit on Wednesday against most currencies, including the Norwegian krone. The US dollar has bounced from essentially the 9.4 NOK level, which is also worth paying attention to due to the fact that the 50-day EMA sits just below there. When you look at the recent move, it is simply a pullback that has been a long time coming due to just how parabolic the rally had been before it.

It is also worth noting that there is a lot of noise just to the left on the chart, an area where I think we should see quite a bit of support based on previous order flow. If we can break above the high of the Wednesday candlestick, then it’s likely that the US dollar will go looking to reach the 9.6 NOK level. Breaking above there then opens up the possibility of a move back to the highs, which are near the 9.9 NOK level. Given enough time, would not surprise me at all to see the US dollar go to the 10.0 NOK level, but obviously, there is a lot of psychology with a level like that. If we can break above the 10.0 level, it’s likely that the market will continue to go much higher, but you should also keep in mind that the Norwegian krone is highly levered to the crude oil market, as Norway is a major holder.

On the downside, if we were to break down below the 9.2 NOK level, then the market will more likely than not challenge the 9.0 NOK level, where the 200-day EMA comes into the picture, so you need to pay close attention to that indicator as it is a major level that a lot of algorithmic and technical traders will pay attention to. Breaking below that level would put the US dollar into a bearish market, something that I would not think is likely to happen anytime soon, but it must be noted that oil markets look very bullish, so it is possible that the Norwegian krone may put up a bit more of a fight against the greenback than some of the other currencies out there. This has been seen in the Canadian dollar as of late, but it is also worth noting that the Bank of Canada is quite a bit more hawkish than the Norges Bank.

Our expectations indicate that natural gas will rise during its upcoming trading.

Spot natural gas prices (CFDS ON NATURAL GAS) stabilized in their recent trading at the intraday levels, to achieve slight daily gains until the moment of writing this report, by 0.80%. It settled at the price of 8.096 dollars per million British thermal units, after declining in trading on Friday by -0.34 %, during the past week, prices rose by 6.33%.

Natural gas futures fell on Friday but maintained their weekly gains, the commodity prices are 200% higher than last year, due to record exports via liquefied natural gas, steady production growth and the recent heat wave that hit some US states in the southern belt.

The Federal Energy Regulatory Commission (FERC) said in its 2022 forecast for summer energy markets, driven in part by liquefied natural gas (LNG) exports, demand growth will outpace oversupply this summer, resulting in year-on-year price increases.

Compared to summer 2021 levels, total domestic dry natural gas production is expected to increase 3.4% this summer, while total consumption is expected to rise 4.8%, according to a summer assessment prepared by Federal Energy Regulatory Authority staff.

FERC cited the Energy Information Administration’s (EIA) forecast for US dry natural gas production to reach 96.9 billion cubic feet per day this summer. The agency’s assessment found that this comes at a time when exports are expected to increase demand for the fuel in the coming months.

Technically, the main bullish trend dominates the movement of natural gas in the medium term and along a slope line, as shown in the attached chart for a period of time (daily). Its movement is also supported by the continuation of its trading above its simple moving average for the previous 50 days. The price faced some challenge represented by the level of the current resistance which is 8.054. This is the resistance that we have referred to in our previous reports, so it is now trying to gain some positive momentum that might help it breach that resistance.

Our expectations indicate that natural gas will rise during its upcoming trading, especially in the event of breaching the resistance 8.054, to target the pivotal resistance level 8.870.

Euro exchange rates were flat at the start of the new week’s trading and at least some of the rally can be attributed to comments by a prominent member of the European Central Bank. European Central Bank Governing Council member Francois Villeroy de Gallo expressed concern that the euro was too weak and thus was contributing to inflation. Accordingly, the price of the EUR/USD currency pair moved towards the resistance level at 1.0453, bouncing back from the 1.0349 lowest support for the currency pair in five years. The euro recovered still needs stronger catalysts.

“Let me stress this: we will carefully monitor developments in the effective exchange rate as an important driver of imported inflation,” Villeroy said at a conference at the Bank of France. Some forex analysts have been warning that the European Central Bank may have to raise interest rates to defend the value of the euro in order to bring down inflation. Persistent euro weakness is making imported goods and dollar-denominated goods like oil and gas more expensive, fueling price pressures that have already pushed eurozone inflation to record levels.

The price of the euro reached its lowest level against the dollar since 2017 last week.

Villeroy’s comments add credence to the argument that the ECB may therefore be willing to raise interest rates on a number of occasions in 2022 to boost the value of the euro. “A very weak euro would interfere with our goal of price stability,” he added.

Villeroy said a “decisive” ECB Governing Council meeting can be expected in June, followed by an “active summer” on the monetary policy front. He indicated that the European Central Bank might consider raising interest rates “toward the neutral rate,” which would imply a move to 0% in the key deposit facility rate.

Eurozone money markets now show that investors are seeking 95 basis points for a rate hike from the European Central Bank in aggregate by the end of the year, compared to about 80 basis points priced at Friday. A move higher in interest rate expectations would exert higher mechanical momentum on the EUR.

EUR/USD fell to a five-year low last week but may attempt a corrective recovery in the coming days if global markets find reasons to cheer on signs that China’s toughest “lockdown” to date may be coming to an end. The European single currency extended its nearly 18-month long downtrend with a dip to its lowest levels since 2017 last week, but it will likely try to recoup losses over the coming days after revealing that Shanghai is ready to begin a gradual reopening from China’s toughest shutdown.

The shutdown of Shanghai has been an important source of global market aversion in recent weeks because the city is home to China’s largest seaport, which is also the world’s most important for its importance in the international supply chains of commodity manufacturers.

Any early headwinds for the euro-dollar rate are likely to be mitigated by ongoing market concerns about the security of European energy supplies from Russia after Ukraine’s national gas pipeline operator halted some pipeline flows to Europe last week. The pause was followed by the Kremlin’s decision to ban gas sales and other transactions with a few important European companies, while both events together sparked fresh speculation about the risks of the euro sliding toward parity with the dollar in the coming weeks or months.

According to the technical analysis of the pair: The general trend of the EUR/USD currency pair is still bearish, and investors do not care about the arrival of technical indicators towards oversold levels. The continuation of the pressure factors on the currency pair that is mentioned a lot, is represented in the disparity in economic performance and the future of monetary policy tightening between The Federal Reserve Bank and the European Central Bank. Also most notably the continuation of the Russian war, which particularly affects the economy of the eurozone negatively.

The closest bears targets for the EURUSD price is to move towards the support levels 1.0325 and 1.0200 and then the parity price. On the other hand, according to the performance on the daily chart, breaking the resistance 1.0800 will be important in changing the trend.