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Gold price tests a multi-month low on a stronger USD

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Will gold hold or fold?

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Costco shares slide despite earnings beat

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Where could the bulls save the S&P 500?


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Asset Watch

Is crude on a collision course?

Tuesday, August 14, 2023

While stocks and bonds have been poor performers lately, commodities have benefited from the soft-landing optimism. And with crude oil leading the pack, the economic lynchpin has gone from the outhouse to the penthouse. However, as critical price levels collide, we may witness a major move in the days ahead.
The small arrows below show how ~$83 switched from support to resistance following the November 2022 breakdown. Since then, crude has suffered two failures as it attempted to surpass the key level in 2023.
Crude has hugged its 10-day moving average since the June breakout and intraday dips have been bought with little hesitation. But, with 10-day MA support at $82.23 and medium-term resistance near $83, crude must decide soon whether the uptrend will continue.

If not, we could see a repeat of April’s failure. The annotation at the bottom shows how crude demonstrated similar behaviour by bouncing off its 10-day MA during intraday pullbacks. Yet, when 10-day MA support collided with monthly resistance, the latter won, a breakdown followed, and the 10-day MA became resistance en route to new intraday lows. This means monitoring traders’ reactions to these levels is paramount this week.

So, will the third time be a charm for crude? Or will another rejection be followed by a dip below the 10-day MA?


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