FX.co ★ 10.08.2022: Investors brace for US inflation report. Outlook for oil, gold, RUB.

10.08.2022: Investors brace for US inflation report. Outlook for oil, gold, RUB.

Yesterday, oil tried to break out of the range it had been stuck in since the middle of last week. As a result, the asset advanced to $98 per barrel but then it quickly returned to $95 per barrel. At the same time, there were no good reasons for such sharp fluctuations.

Thus, yesterday's rally should be seen as a demonstration of what will happen today after the United States reports data on inflation. After all, if inflation remains unchanged or shows signs of a slowdown, this would mean that the US economy is stronger than expected. Consequently, if demand for energy is damped, its decline will hardly be substantial. This will make investors optimistic and contribute to the asset’s gains in the near future.

According to the trading chart, Brent crude oil eased the pace of its corrective move. The quote settled near the level of $98 per barrel, where the volume of short positions increased. If the price fixes below 95 on the four-hour chart, the benchmark will most likely extend losses, heading towards the support level of 93. Alternatively, a return to the area of 97.50/98.00 on the four-hour chart will result in a continued correction. Speaking of gold, the situation is somewhat different. Upbeat forecasts for the US economy are expected to make the yellow metal less attractive. In this case, investors will shift their focus to the real sector of the economy or the stock market. So if inflation really remains unchanged, gold will lose ground. In case today’s inflation data shows signs of a slowdown, the way to $1,700 per ounce will open. In the meantime, gold futures successfully tested the resistance level of 1,800 but then entered a technical pullback, sliding by 0.7%. Nevertheless, market sentiment is still bullish. Thus, if the price consolidates above the level of 1,800 at least on the four-hour chart, the metal may well resume its bullish run. At the same time, keep in mind that fundamental factors will contribute to lower gold prices. Much will depend on whether speculators will be able to reverse the current trend or not. This process requires time and a gradual increase in the volume of short positions. A subsequent sell signal relative to current values will be generated if the price fixes below the level of 1,780. The situation with the ruble remains unchanged. As before, the pair is increasingly trying to go below the mark of 60 rubles per dollar. In fact, the ruble’s downside potential has been completely exhausted. Moreover, until the Ministry of Finance and the Bank of Russia take any bold steps to lower the national currency, the US dollar will hardly gain value. Rather, on the contrary, investors will run out of patience, thus pushing the ruble back up. In this case, the Russian currency will head for 50 rubles per dollar. In this situation, the best trading tactic is to catch outgoing momentum, which will help determine the pair’s further direction. Trading within a price channel is impossible due to high risk. Thus, it is worth focusing on the 58.50 mark in case the pair resumes a downtrend. If the price rises above 61.50, it will most likely extend gains and move towards the area of 62.50-65.00.


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*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade
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