Following the core retail sales data of the United States on Monday, the USD investors went bearish and as a result the major pairs along with gold gained against the greenback. Similar trend continued on Tuesday as the bulls remained firm against the bears, where the metal failed to break its strong support level of 1272 area that it tested on Monday as well. This support is apparently the 200-day EMA on its 30-minutes chart, while on the other hand bears did not let the price cross the psychological level of 1300 as the metal is currently hovering at around the 1292 area.
The U.S. stock market fell in the U.S session on Tuesday amidst rumors that the Federal Reserve Chairman, Ben Bernanke would support the greenback in his speech due on Wednesday. The bond buying plan would be under debate where he may hint some sort of reduction in the plan as there is huge pressure on him regarding this massive $85 billion bond buying each month.
Markets may have played under the speculation on Tuesday as the majors also gained despite bad economic data, which is a hint that the good selling price is being set for Wednesday’s bearish move if Bernanke’s words hinder the quantitative easing measures.
Oil Dips after Setting Fresh Highs
The U.S. Crude Oil has been under the control of bulls for the past few weeks as it entered the bullish channel after crossing and sustaining above $101.2 a barrel level. The gas consumption in the United States has been surging that has already led to an increase in the fuel prices to around $5 a gallon in the U.S, hence causing the prices to increase as the demand is increasing. Moreover, the settlement of the democratic government in Egypt is yet to be done, as the protests are still going on by Morsi’s supporters.
The U.S crude oil topped the level of $107.18 on Tuesday as the industrial production in the United States grew by 0.3% against the previous reading of 0.0%, after which it gave correction to the level of $105.82 a barrel.
Interesting, on the other side, the CEO of Gulf Oil has a prediction that that he is seeing the oil prices much lower than they are right now as the supply may halt due to less extraction of crude oil, plus the demand may also weaken, as much depends on the Chinese economy which is not growing at a good pace.