October 25, 2020

WELTRADE Blog | Gold correction is planned up to $ 1400. Oil shut gap and looks down

WELTRADE offers analytics of the latest news on financial markets. In this article we will consider possible scenarios on major trading assets.

Today we have the last day of the month and quarter, traditionally the market activity of such days is devoted to fixing positions and formatting the results of the reporting period.

Thus, we can not expect serious fluctuations today. Consider what is happening on the main trading instruments, at the moment.

Brent Oil

WELTRADE Blog | Gold correction is planned up to $ 1400. Oil shut gap and looks down

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Last week, Brent oil fell no lower than$ 60 mark and in fact, we can say that the gap that was formed after the drone attack on oil refineries in Saudi Arabia is closed. Thus, the entire upward movement fully recouped.

By and large, we are in the same price range that we were before. That is, at the moment the mark is $ 60-63. This range is very unstable, but also without a special direction.

As we can see, recent events did not causeno enthusiasm in the oil market. There is reason to believe that oil will continue to remain under pressure, slowly moving to new lows. That is, if we steadily break below the $ 60 mark, the target will be the $ 58 mark.

GBP / USD

Turn to the pair pound / dollar. The pound fell below 1.23. Last week and tonight 1.2270 - the lows in this pair were tested.

WELTRADE Blog | Gold correction is planned up to $ 1400. Oil shut gap and looks down

As we can see, there are no serious fluctuations,despite the fact that there were reports of a possible impeachment of British Prime Minister Boris Johnson. Naturally, the fact itself is very negative, but the market apparently absorbed all the negativeness into itself so much that it did not pay particular attention to this factor.

Here Brexit continues to steer dynamics and inin general, significant positive on the horizon is not observed. Staying in such a moderately negative background, the pound will continue to remain under pressure. Apparently there is some stabilization today, as part of such short positions will be fixed.

XAU / USD

An interesting situation in gold. The metal again approached its critical support zone of $ 1480-1485 - testing is in progress for this zone. It can be seen that demand is still present.

WELTRADE Blog | Gold correction is planned up to $ 1400. Oil shut gap and looks down

From a technical point of view, the failure is lower - $ 1480It looks quite negative. As we have already noted, a “head and shoulders” figure has formed on the daily chart. We mentioned the right shoulder - $ 1,535 mark. So she did her job, the shoulder is formed and now the price is hammering the base of the “head and shoulders” figure. In case of breakdown below - the target will be the mark of $ 1450. That is, about $ 35 lower, the movement itself can be quite fast. By the way, the long positions accumulated here are quite serious and fixing positions on the eve of the end of the reporting period may well provoke a sell movement below the $ 1,480 mark. Formally, the upward trend remains, the goal will remain $ 1535 and then, if we pass it, then $ 1550-1560, etc.

The reasons for the growth of gold again remaingeopolitics, risk situation. If everything remains tense, then gold will again act as a protective asset and naturally interest will return to it. But today we see that pressure remains and sales remain.

Here, speculators will try to push the level of $ 1480 to see how large these stop sales orders are. If we break below, it is likely a powerful downward movement.

EUR / USD

If we turn to the euro / dollar pair, then there are no major changes, the pressure remains. Last week, the pair almost reached 1.09, but there is no continuation.

WELTRADE Blog | Gold correction is planned up to $ 1400. Oil shut gap and looks down

The pair is trading in a fairly narrow range1.0900-1.0950. Serious changes in the situation are not yet expected, despite the news negative. In the eurozone, growth has slowed down to the danger of a recession. Although officials remain optimistic, economic statistics indicate the opposite.

So if a break below 1.09 happen,then the downward movement at one speed or another will continue to the area of ​​1.0800-1.0850. Strong movement should not be expected, liquidity is high and all sharp impulses will inevitably bind in the opposite direction. High liquidity dampens any fast movements.

BTC / USD

We also turn our attention to the situation in the markets.cryptocurrencies, namely on BTC / USD. A break below the $ 9,000 mark last week. That is, an important technical mark has been passed, Bitcoin has fallen.

Currently, it is trading below $ 8,000, today it was even $ 7,700, and while significant optimism is not expected here, pressure will remain.

The launch of the Bakkt trading platform (trading in futures with the possibility of physical delivery) did not have a significant impact, and interest in bitcoin materialized.

The liquidation of long positions is all that we are seeing here and the activity of speculators, large players who will try to push the price even lower.

The purpose of moving down is the mark of $ 7000-7100. This zone may become the next level of support. As for the top level, this is the mark of $ 8000, then it will be $ 8300-8400 and even higher - $ 8750. But while these goals do not seem to be achievable, to resume the growth of bitcoin, you will have to climb above $ 9400 and gain a foothold there. Only then will the technical picture unfold in the direction of a new wave of growth. While we note the consolidation of $ 7700-8000, with a very high risk of falling to the level of $ 7500.