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FX.co ★ 11.08.2022: Oil posts mild gains on cooling inflation. Outlook for oil, gold, RUB

11.08.2022: Oil posts mild gains on cooling inflation. Outlook for oil, gold, RUB

US inflation cooled meaningfully in July. Against this background, oil gained value, although its rally was not as strong as expected. At the same time, judging by the latest data, demand in the United States is unlikely to fall significantly.

Meanwhile, Europe continues to suffer from heat and severe drought that force countries to dip into their energy reserves. This will inevitably lead to a sharp increase in demand for oil and gas in the near future. Apparently, price growth in the oil market is constrained by the latest news regarding crude oil production. Data showed that Russian oil production bounced back, nearing the level it was before the invasion of Ukraine. This news may well calm the market and contribute to a decline in quotes to $95 per barrel.

Now let’s take a look at the trading chart. The support level of 93 again acted as a strong obstacle to sellers. As a result, Brent crude oil futures pulled back up by about 4%. Based on price fluctuations within one week, it can be assumed that the market is moving sideways in a range of 93/98. In this situation, the best tactic is to trade with a view of breaking one or another boundary of the range (93/98). This will help determine the further direction in the market.

Oddly enough, gold barely reacted to US inflation data. The yellow metal first jumped but then quickly returned to the area of ​​$1,790 per ounce. At the same time, its behavior is quite explicable. Most financial instruments began to gain value solely on expectations of a more modest increase in interest rates by the US Federal Reserve. However, these predictions may well prove wrong. Shortly after statistics on inflation were released, Neel Kashkari said that the better-than-expected inflation report did not change his view on the need for more aggressive interest rate hikes. So growth may be premature and not justified. Thus, as long as the situation is uncertain, gold is likely to continue trading around ​​current levels.

The ruble turned out to be one of those resilient instruments that showed no reaction to data on inflation in the United States. In fact, the quote was ticking up at a time when the report was published. Moreover, the Russian currency continues its efforts to go below the mark of 60 rubles per dollar. Thus, nothing has changed. Market participants are still waiting for the Bank of Russia and the Ministry of Finance to ease the previously introduced measures and restrictions. Apparently, this will happen only after the Russian currency once again rallies and heads towards 50 rubles per dollar.

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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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