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Commodity Daily Report – Oil Prices Decline, Gold Prices Grow

On Tuesday, WTI crude oil lost about two dollars in price amid fears of declining demand.  Yesterday, US President Donald Trump spoke at the UN General Assembly with sharp criticism of China’s trade policy. After this, concerns about the success of trade negotiations intensified. An additional pressure on the instrument was provided by API data, which reflected an unexpected increase in US stocks by 1.4 million barrels per week.

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In addition, the market is sensitive to any information on the timing of the restoration of oil facilities in Saudi Arabia. An accurate estimate of the time for repair work is still impossible, while messages on this topic continue to have a significant, but short-term impact on quotes.

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Investors should follow the news from the Middle East.

Support and resistance

On the H4 chart, the instrument is testing the lower border of Bollinger Bands, which is the key support level. The indicator is reversing down, and the price range has expanded, indicating a continuation of the downtrend. MACD histogram is in the negative zone keeping the sell signal. Stochastic entered the oversold area, so a strong buy signal can be formed in 1-2 days.

mifinance

Support levels: 56.70, 55.68, 54.55, 53.20.

Resistance levels: 57.57, 58.12, 58.67, 59.53, 60.52, 61.92.

Trading tips

Short positions may be opened from the current level with target at 54.55 and stop loss at 57.20.

Long positions may be opened above 57.30 with the target at 58.45 and stop loss at 56.40.

Implementation period: 1-3 days.

Gold Prices Grow

Gold prices grew moderately on Tuesday, updating local highs of September 5. Quotes are still supported by the prospects for further slowdown in global economic growth and increased tension in the Middle East. At the same time, investors are optimistic about the news regarding the US-Chinese trade negotiations. The US Treasury Secretary Steven Mnuchin said that formal negotiations with China at the highest level are taking place in two weeks.

A certain impact on the instrument was exerted by the news from the UK where the Supreme Court ruled that the suspension of parliament earlier initiated by Prime Minister Boris Johnson was unlawful. Thus, the parliament has much more time to work out a final deal on Brexit, which somewhat reduces the risks of a no-deal Brexit.

Support and resistance

Bollinger Bands in the D1 chart demonstrate flat dynamics. The price range is expanding but it fails to catch the development of “bullish” trend at the moment. MACD indicator is growing, keeping a stable buy signal (located above the signal line). Stochastic, approaching its highs is inclined to reverse downwards, reflecting the overbought instrument in the ultra-short term.

It is necessary to wait for the clarification of trade signals from the indicators to open new positions.

Resistance levels: 1535.39, 1546.55, 1556.76.

Support levels: 1523.95, 1516.70, 1510.11, 1500.00.

Trading tips

To open long positions, one can rely on the breakout of 1535.39. Take profit — 1556.76. Stop loss — 1523.96.

The breakdown of 1523.95 may serve as a signal to new sales with the target at 1500.00. Stop loss — 1535.39.

Implementation time: 2-3 days.

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