Forex Video Briefing (8/15) – Oil, Gold, Silver

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Forex Video Briefing (8/15) – Oil, Gold, Silver

WTI Crude oil consolidated in May above 96.56 and below 98.67. Yesterday, we had a sharp sell-off that broke below this consolidation range, extending the prevailing bearish trend. If there is a pullback, watch out for sellers in the 96.50-60 area. The central pivot of the previous consolidation range is around 97.74. This means if price pulls back and manages to break above 97.75, we can be looking at a bullish correction to extend into the short-medium term. However, if price holds below 97.70 for example, the WTI Crude will remain bearish with the 2014-lows around 91.25 in sight.

Gold was trying to break above this week’s descending triangle after it broke above a falling wedge last week. However, we saw price slide sharply today breaking below the triangle support at 1305. This price action is threatening to invalidate last week’s bullish breakout signal. However, we are seeing some support in the 1290-1295 area. I was talking about a buy-on-a dip strategy throughout the week. I guess many traders had the same idea because we are currently seeing gold rally back above 1305. Now, a break above 1315 would signal bullish continuation. Be careful. All this price action can be just noise. There is a bullish bias brewing, but unless price breaks above the triangle resistance seen in the daily chart, gold would remain in a consolidation/contraction mode in 2014. To the downside, it needs to break below 1260, at least 1268 before opening up a bearish outlook.

Silver on the daily chart is also in consolidation, and also showed some bullish bias since June. However, it has turned bearish in a more persistent manner, and today’s dip is reaffirming the bearish outlook toward the lows on the year around 18.70. The 4H chart shows a break below a consolidation developing for a couple of weeks between roughly 19.73 and 20.17. You can say that there is a central pivot around 20 . Today’s sell-off broke below this range. If a pullback then holds under 20, the bearish outlook remains. However, a break above 20, would give the bearish outlook trouble, especially if it breaks above the falling channel resistance. However, if price can’t push above 20.17, and returns below 20, the focus remains toward the 2014-lows around 18.70