Crude oil price continued to decline to press on 71.00$ barrier and attempts to break it, noticing that the price begins today with bullish bias affected by the RSI positivity, and it might achieve some intraday gains before attempting to decline again.
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As noted in prior articles, price action in natural gas since the January 31 swing low at $2.99 has been contained within last week’s price range. Last week ended with a wide range red candlestick pattern. Trading inside that range can lead to price behavior like what is seen inside a consolidation range. Choppy price action with unreliable follow-through is common. Therefore, it can be helpful to know what patterns are forming and evolving and the key price levels to pay attention to.
Pattern Integrity Retained
In the near-term, natural gas is in the process of advancing from the $2.99 swing low. Since then, it has formed a small rising ABCD pattern (light blue) as Thursday’s high generated a higher swing high (above B) and therefore a bullish trend continuation signal. Despite today’s bearish performance, if natural gas stays above the interim swing low at $3.16 the price structure of the ABCD pattern remains intact and a continuation higher is anticipated. That expectation would change on a drop below $3.16 as that would violate the integrity of the ABCD pattern of higher swing highs and higher swing lows.
ABCD Pattern Upside Target is $3.58
An initial upside target from the pattern points to $3.58. That is in the middle between two of the major moving averages. The 50-Day MA is at $3.52 and the 20-Day is at 3.65. Each line previously identified trend support, following the upside gap on October 29. During the subsequent advance the 50-Day line did a better job of holding as support until it was broken during the sharp drop on January 28. Therefore, it presents a potentially more significant price area, and it could stop an advance and lead to a bearish reversal. Watch and observe the behavior of natural gas around the 50-Day line, with this possibility in mind.
For a look at all of today’s economic events, check out our economic calendar.
Wheat price rallied upwards strongly yesterday to succeed achieving our waited target at 599.00$, which represents 38.2% Fibonacci correction level for the entire decline measured from 728.30$ to 519.10$, which means that breaching it will push the price to achieve additional bullish correction that its next target reaches 623.70$.
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Silver price moves higher to near $32.40 as bond yields trade cautiously ahead of the US NFP data for January.
Investors expect the US economy to have added 170K workers last month.
Upbeat US labor market data would force traders to raise bets supporting the Fed to keep interest rates steady for longer.
Silver price (XAG/USD) climbs to near $32.40 in European trading hours on Friday. The white metal gains as the US Dollar (USD) and bond yields tick lower ahead of the United States (US) Nonfarm Payrolls (NFP) data for January, which will be published at 13:30 GMT.
Investors will focus on employment data to gauge the Federal Reserve’s (Fed) monetary policy outlook. On Thursday, Dallas Fed Bank President Lorie Logan said she would support holding interest rates at their current levels until the “labor market doesn’t falter.”
The US NFP report is expected to show that 170K fresh workers were added to the labor force in January, fewer than 256K in December. The Unemployment Rate is estimated to have remained steady at 4.1%. Signs of strong labor demand would boost market expectations that the Fed will keep interest rates in their current range of 4.25%- 4.50% for longer. Such a scenario would be unfavorable for the Silver price.
Investors will also focus on the Average Hourly Earnings data, which is a key measure of wage growth. On year, the wage growth measure is expected to have decelerated to 3.8% from 3.9% in December.
Ahead of the US NFP, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades subduedly around 107.70. 10-year US Treasury yields tick lower to near 4.43%.
Silver technical analysis
Silver price strives to break above the immediate resistance of $32.50, which is plotted from the December 9 high. The outlook of the white metal remains bullish as the 20-day Exponential Moving Average (EMA) is sloping higher near $30.90.
The 14-day Relative Strength Index (RSI) oscillates in the 60.00-80.00 range, suggesting that the momentum is bullish.
Looking down, the upward-sloping trendline from the August 8 low of $26.45 will be the key support for the Silver price around $29.50. While, the October 31 high of $33.90 will be the key barrier.
Silver daily chart
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold’s. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold’s moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
Bitcoin price (BTCUSD) still stuck between the trend keys represented by 95195.00$ support and 100000.00$ resistance, which makes us continue with our neutrality until the price surpassed one of these levels followed by detecting its next destination clearly.
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Silver price bounced upwards after the decline that it witnessed in the previous sessions, as it approached the key support base 31.63$, noticing that Stochastic provides positive signals that support the chances of achieving more rise in the upcoming period.
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Gold price finds fresh demand early Friday as traders reposition ahead of US NFP data.
Fed rate cut expectations and waning trade war fears keep US Dollar on the back foot.
Impending Bull Cross on the 4H chart keeps Gold buyers hopeful.
Gold price is resuming its record-setting rally early Friday after taking a brief pause a day ago. However, Gold buyers stay cautious in the run-up to the critical US Nonfarm Payrolls (NFP) data release.
Will Gold price refresh record highs on weak NFP print?
All eyes now remain on the US labor market data, which will likely provide fresh insights on the scope and timing of the US Federal Reserve (Fed) interest rate cuts this year. The data is also likely to have a significant impact on the US Dollar (USD) and the US Treasury bond yields, eventually influencing the near-term direction in Gold price.
The US economy is seen creating 170,000 jobs in January after recording a stellar job gain of 256,000 in December. The Unemployment Rate is likely to remain at 4.1% in the same period. Meanwhile, Average Hourly Earnings are set to rise by 3.8% in January, compared to a 3.9% increase previously.
A smaller-than-expected increase in the headline NFP figure and slowing wage growth could indicate loosening labor market conditions in the US, reviving dovish Fed expectations and driving Gold price to fresh all-time highs close to the $2,900 threshold. In case of an upside surprise, markets will double down on the recent hawkish hold decision by the Fed, dialling down expectations of two Fed rate cuts this year.
The US Dollar will likely receive the much-needed respite from a potentially strong US payrolls data, initiating a corrective decline in Gold price.
The Greenback consolidates weekly losses heading into the main event risk for Friday – the US employment data, bearing the brunt of receding fears of a potential global trade war after US President Donald Trump’s pushback on Canada and Mexico for a month while markets look past the US-Sino tariff war, expecting no further escalation.
This has helped the USD-denominated Gold price hold near lifetime highs.
Gold price technical analysis: Four-hour chart
Gold price portrays an impending Bull Cross on the four-hour time frame. Gold buyers need a four-hour candlestick closing above the falling trendline resistance at $2,862 to validate the bullish continuation pattern.
If the further upside is confirmed, Gold price will retest the record highs at $2,882. The next relevant target is aligned at the $2,900 round level, above which the $2,95 psychological level will be tested.
The Relative Strength Index (RSI) points north while above the midline, currently near 63. The leading indicator remains supportive of the upside bias.
On the flip side, any retracement will meet the initial demand at $2,849, the 21-four-hour Simple Moving Average (SMA).
The falling trendline support at $2,826 will be the next cushion for Gold price, below which the $2,800 level will be challenged.
Economic Indicator
Nonfarm Payrolls
The Nonfarm Payrolls release presents the number of new jobs created in the US during the previous month in all non-agricultural businesses; it is released by the US Bureau of Labor Statistics (BLS). The monthly changes in payrolls can be extremely volatile. The number is also subject to strong reviews, which can also trigger volatility in the Forex board. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish, although previous months’ reviews and the Unemployment Rate are as relevant as the headline figure. The market’s reaction, therefore, depends on how the market assesses all the data contained in the BLS report as a whole.
The GBPJPY pair ended the last negative attack by touching the target at 187.70, facing solid support as appears on the chart to start forming correctional bullish waves by consolidating near 188.50 now.
Note that the continuous consolidation above the mentioned support will confirm forming new bullish waves to expect rallying towards 189.50, while surpassing it will extend trades towards 190.90, while facing negative pressures and crawling below the current support will confirm moving to new negative track to suffer big losses by moving towards 185.90 first.
The expected trading range for today is between 187.70 and 189.50
Bitcoin price (BTCUSD) shows bearish bias to head towards potential test to the key support 95195.00$, which represents one of the next trend keys besides 100000.00$ resistance, and as we mentioned yesterday, the price needs to breach one of these levels to detect its next destination clearly, which makes us continue with our neutrality until now.
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