In Monday's (October 16th) Asian session, WTI crude oil oscillated downward, and it is currently trading near $86.1/bbl. Last Friday, oil prices surged by $5, and it once rose by 6%. It was too surprising for many investors to respond, especially for those who just closed their long positions. Recently, oil prices have oscillated much, and any delay in trading will have different results. Last week, oil prices have oscillated significantly, and geopolitical factors are the main reason. At the beginning of the week, the market believed that the Israeli-Palestinian conflict would not have a major impact on the crude oil market. However, the crude oil fell sharply as Israel gave a 24-hour deadline, triggering concerns that the situation may escalate further, and the market was driven by risk-aversion sentiments. As a result, crude oil, gold, and the dollar have risen sharply. We have previously emphasized, that the market trade should respect the fundamentals, and investors should not keep a bearish view on oil prices. In addition, our trading should follow the direction with the least resistance. At present, the market is driven by geopolitics, and all the technicals will be meaningless. Nonetheless, chasing the rise is not recommended. As the supply and demand remain stable, it is not likely for WTI crude oil to change much. In the short term, we need to focus on whether the conflict will expand again. If it does and ultimately affects the Strait of Hormuz, about 20% of the global oil supply will be threatened. Then the oil price will appreciate faster.

Geopolitically: The Israeli-Palestinian conflict has further expanded, with Israel giving a 24-hour deadline for all civilians in Gaza to evacuate the city and relocate to the south.

Focus: U.S. New York Fed Manufacturing Index for October. 

WTI crude oil closed positively yesterday. It once retraced to 82.2, but surged during the European and the U.S. sessions, closing the daily chart with a long positive candle. Technically, the long positive candle turns the previous weak pattern into a bullish trend in the near term, but the dumpling top will be founded by the oscillations at highs, and oil may retrace soon for consolidation. Despite a bullish trend, investors should not chase the appreciation, but wait until WTI crude oil descends to the key support levels. Then, investors could go long with small positions. It is important that investors should never go long before a retracement to avoid suffering a loss, and the key support below will be in the area from 85.3 to 85.8.  

Trading recommendations: Buy at lows. If WTI crude oil depreciates to 85.0, investors could go long with small positions and set the stop-loss at 84.5. To take profits, the first target will be at 87.5, where they can move the stop-loss to breakeven, and the second target should be set at 88.5.

Trading direction: Long

Entry price: 85.000

Target price: 87.500

Stop loss: 84.500

Support: 85.000/83.800

Resistance: 87.700/89.500

Spot gold depreciated with oscillations during Monday's (October 16th) Asian session, and it is now trading around $1920. The recent market has been driven by risk aversion. Gold, U.S. dollars, and crude oil have all risen as investors flocked to buy safe-haven assets amid the intensification of the war in the Middle East. Gold prices rose more than 3% last Friday, recording the largest weekly gain since mid-March. We emphasized on Friday that if the gold could break through $1875, it would be likely to hit 1900. It did go like that. In the past week, we have been advising investors to be bullish and go long based on fundamentals, and the gold price jumped by &110 last week. The profit and loss ratio of bulls was really amazing. But what's coming next? With the escalation of the war between Israel and Hamas, more Middle Eastern countries may be involved in it. The gold price remains fundamentally bullish, so we can still go long on gold if there are pullbacks. 

Data: The University of Michigan consumer sentiment for the U.S. was 63 in October, while it was expected to be 67.2 and the previous result was 67.7. 

Today's focus: U.S. NY Fed Empire State Manufacturing Index for October.

Gold closed with a surge of 3% on Friday, breaking above 1884 and 1900 step by step to reach 1910, once touching 1933. If you have followed our instructions from a long time ago, our judgment was accurate last week as the gold was reversed from 1810. We also indicated that gold would not retrace before getting closer to the key resistance level of 1884, and predicted it to start retracing from 1885. It did fall to the lowest level of 1865. Besides, we said gold would be boosted to 1900 if it arrived at the 1875 level, i.e. a reversal followed the retracement, and gold appreciated at the end. Investors who followed our instructions gained substantial profits. At present, gold is still under a bullish trend, and investors should go long after retracements. Today, investors should focus on the support in the range from 1910 to 1915, and further strong support will be at 1900. If gold stays above 1900, the bullish trend will maintain, though there may be retracements driven by taking profits. Some investors may also lose even if they follow the right direction because they expect a retracement at highs and abandon their long positions. It would be worse if they didn't stop losses and get trapped. During the trade, it is essential to stop trading in this way when the profit/loss ratio is low. Today, investors should not follow the ascending trend but try to wait for a retracement before going long. If gold retraces to 1915 and shows signs of stopping decline, investors can go long with small potions, and they can even wait until gold arrives at 1903 if they want to avoid risks.

Trading recommendations: Buy at lows. If gold retraces to 1903 today, investors can go long with small positions shortly, and set the stop-loss at 1889. To take profits, the first target will be at 1923, where they can partially take profits and move the stop-loss to breakeven, and the second target can be fixed at 1933.

Trading direction: Long

Entry price: 1903

Target price: 1933

Stop loss: 1899

Support: 1915.000/1903.000

Resistance: 1933.000/1950.000

The Australian Dollar (AUD) faced a tumultuous day as it underperformed in the currency markets, grappling with a confluence of factors that weighed on its value. Chinese economic data played a pivotal role in shaping the AUD's trajectory, underlining the close economic ties between Australia and its largest trading partner, China.

China, a critical determinant of the AUD's performance, reported economic indicators that fell short of market expectations. Notably, China's inflation rate remained stagnant at 0% year-on-year in September, missing the market consensus of a 0.2% reading. This underwhelming inflation data hints at challenges within China's economic landscape, potentially affecting currencies closely tied to its economic fortunes, such as the Australian and New Zealand Dollars.

While China's trade surplus experienced a modest uptick, reaching $78 billion, the country's exports and imports both dwindled by 6.2% year-on-year. These figures underscore that China is still grappling with hurdles in regaining significant growth momentum. The Aussie and the Kiwi, being sensitive to China's economic performance, bore the brunt of these statistics.

The concerning outlook for China's economy resonates far beyond its borders, impacting the broader global economy. As China plays a pivotal role in international trade and supply chains, any weaknesses in its economic performance can reverberate globally, influencing currencies like the Australian Dollar.

Experts predict that Chinese exports are likely to remain weak in the fourth quarter due to sluggish demand from the U.S. and the European Union. Additionally, China's domestic demand, while on a path to recovery, is progressing at a relatively slow pace. Targeted support measures, particularly in infrastructure and manufacturing investment, are being implemented to bolster the country's internal economic dynamics.

In response to the release of this Chinese economic data, Asian markets declined, and the Australian Dollar incurred losses against most of its major counterparts. The Pound to Australian Dollar rate extended its recovery, while the Australian Dollar-U.S. Dollar rate faced downward pressure.

However, prior to the Chinese data release, the Australian Dollar had already experienced a sharp selloff, triggered by robust U.S. inflation figures. These strong inflation numbers created a 'risk-off' sentiment that typically penalizes the Australian Dollar. As expectations of a December rate hike by the Federal Reserve solidified, the AUD/USD exchange rate lost 1.50% of its value on Thursday.

The anticipation of higher U.S. interest rates has profound implications for global financing conditions. It is expected to exert pressure on the growth dynamics of the global economy, particularly affecting commodity-linked currencies like the Australian Dollar. As the AUD grapples with these headwinds, it is imperative for traders and investors to closely monitor developments in China, U.S. monetary policy, and global economic trends as they navigate the complexities of currency markets.

Following the impulse sell-off in AUDUSD on Thursday, the price appears to have entered a sideways movement on Friday. The coming week might witness a potential pullback before continuing its downward trajectory. The 4-hour timeframe reveals that the price is currently situated on a previous support zone. Traders are advised to closely watch this currency pair to gauge if it can gather the necessary momentum to breach the support zone.

ENTRY PRICE : 0.6310

STOP LOSS    : 0.6370

TAKE PROFIT : 0.6200

In a tumultuous week for global markets, gold emerged as a star performer, rallying more than 3% and securing its most significant weekly gain since March. This surge was largely attributed to the intensification of the conflict in the Middle East, which sent investors scrambling for safe-haven assets. The price of gold surpassed $90 from its closing rate last week, painting a bullish outlook for the precious metal.

As the war in the Middle East continues to rage on with no apparent conclusion on the horizon, experts predict that gold's ascent will persist into the coming week. Opening prices are anticipated to fall within the range of $1,938 to $1,950, reflecting the market's appetite for this time-tested safe haven.

The protracted Middle East conflict is unlikely to find swift resolution, and the geopolitical landscape continues to be volatile. What we witness today is the culmination of tensions that have been mounting over many years. Consequently, against this backdrop of global unrest and the prevailing technical indicators, gold's bullish trend is gaining considerable momentum.

In essence, gold has established itself as a reliable refuge for investors seeking shelter from the stormy seas of geopolitical turmoil. As long as uncertainty reigns in the Middle East and beyond, the yellow metal appears set to maintain its trajectory toward higher price levels.

The trend, it seems, has been unequivocally reset, ushering in a new era for gold as a prime beneficiary of a world marked by geopolitical unrest and financial market volatility. The shine on gold, it appears, will only grow brighter.

A closer look at the weekly chart reveals a captivating candlestick pattern featuring a hammer and a bullish engulfing pattern. This formation materialized as gold prices tested a robust medium-term support level at $1,809. Such patterns, particularly on higher timeframes, hold substantial significance in shaping medium and long-term price movements.

On the daily chart, an even more compelling picture unfolds, with a decisive break of the downtrend resistance. The week culminated with a closing price in proximity to the $1,934 level, indicating a strong likelihood of breaching this level in the near term. As a result, gold is expected to continue its robust ascent towards critical milestones such as $1,950, $1,984, and possibly even $2,000.

ENTRY PRICE : 1900

STOP LOSS : 1880

TAKE PROFIT : 1950

The energy market witnessed a substantial spike in WTI crude futures, with prices climbing past $87 per barrel. A key factor in this surge has been the ongoing conflict in southern Israel and Gaza, which has escalated geopolitical tensions in the Middle East. Iran's foreign minister added to these concerns by warning that Tehran-backed militants could open a new front in Israel's battle against Hamas if the blockade of Gaza persisted.

This conflict, along with Iran's involvement and threats, has put oil markets on edge, causing a ripple effect that's contributing to soaring oil prices. Geopolitical uncertainty often translates into higher oil prices, as the fear of supply disruptions can lead to speculative buying.

The United States has further exacerbated the situation by imposing sanctions on the owners of tankers transporting Russian oil at prices exceeding the G7's price cap of $60 per barrel. This move aims to penalize Russia for its invasion of Ukraine. The combination of these sanctions and the Middle East tensions has led to a perfect storm, driving oil prices to levels not seen in years.

While these sanctions directly impact Russian oil, they have broader implications for the oil market as a whole. Disruptions in Russian oil supply could strain global oil markets, further contributing to the overall price increase.

Amidst these developments, official data revealed that US crude inventories surged by 10.176 million barrels last week, marking the largest increase since February. However, there's an interesting twist: supply at the storage hub in Cushing, Oklahoma, actually decreased.

This divergence indicates that despite the surge in inventories, there may be specific factors at play in Cushing that are driving this difference. It's essential to monitor this situation closely, as it could influence future market dynamics.

From a technical analysis standpoint, traders are now eyeing a potential buying opportunity in the USOIL market. Trading in a previous downtrend, USOIL has successfully broken free from it. Market analysts are waiting for a correction to reach the confluence zone around $86.00, which may provide the necessary support for the trend to continue upwards.

As geopolitical tensions persist and with the impact of sanctions on the horizon, oil markets are expected to remain volatile. Traders and investors will be keeping a close watch on developments in the Middle East and how the situation evolves between Russia and the United States, as these factors will continue to influence oil prices in the weeks to come.

ENTRY PRICE : 86.00

STOP LOSS :  82.00

TAKE PROFIT : 94.00

On Thursday, the latest report released by OPEC indicates that global crude oil inventories could decrease by approximately 3 million barrels per day in the last three months of this year. If this materializes, it will result in the largest deficit in the last 30 years. Furthermore, OPEC largely maintains its estimates for global crude oil supply and demand for the current and next year. The organization expects that its 13 member countries need to produce an average of 30.82 million barrels per day this quarter to maintain market balance, a significant increase from September's production level of 27.76 million barrels per day, as reported.

From a fundamental perspective, the fragility of crude oil supply in the fourth quarter persists, primarily due to the sustained production cuts by OPEC+ and the potential for supply disruptions caused by geopolitical conflicts. Therefore, the supply side remains a strong driver for oil prices.

From the demand perspective, there is a marginal weakening of demand in the fourth quarter, especially with rapid declines in gasoline demand year-on-year and significant accumulations in gasoline inventories. It is expected that profit margins from refining petroleum products will continue to contract, impacting refineries' load reductions and causing a decline in demand. Consequently, the demand side tends to put downward pressure on oil prices.

Taking macroeconomic factors into account, with the weakening of US economic data, the "recession narrative" is reentering the public's view. Economic pressures in the Euro-American economies are also expected to decrease in the fourth quarter, and it is anticipated that risk assets will come under high pressure.

In terms of geopolitics, neither Palestine nor Israel are major oil-producing countries, and their overall impact is limited at present. However, it is important to monitor whether the conflict between Palestine and Israel spreads to other oil-producing countries in the Middle East and whether it affects Saudi Arabia's future production policies and Iranian exports. Palestine has explicitly pointed out Iran as its supporter, with Iran's production and exports seeing a significant increase this year. It is essential to watch whether the US tightens its policy towards Iran. Any additional sanctions would be seen as a positive development as the current demand exceeds supply. We believe the only downside factor is rising interest rates, and if crude oil prices rise above $100 per barrel, demand may be disrupted.

In terms of funding, looking at the microstructure of crude oil prices, the backwardation structure has tightened slightly, and the willingness of macro funds to use crude oil as an asset allocation will decrease. Overall, there is expected to be downward pressure on overall crude oil positions. With crude oil prices rapidly filling the previous gap, we anticipate crude oil prices to fluctuate in the range of $80.00 to $90.00 per barrel.

WTI crude oil prices have been steadily rising since July, reaching a 13-month high of $93.94 per barrel on September 28th, followed by a correction. Despite successfully halting the downtrend above $80.00, the recovery momentum appears more volatile.

One key factor has been the surge in safe-haven sentiment driven by the conflict between Palestine and Israel on October 7th, causing oil prices to open up at a gap on Monday. However, subsequent price filling has necessitated technical buying, and the current rapid price increase confirms this scenario. It's worth noting that various narratives are at play, as depicted in our technical chart.

If bears attempt to push prices lower, the immediate support level of $81.50 will be the first line of defense. Breaking below this range could lead prices down to the August low of $77.60. If that level is breached, the June resistance level of $75.00 will provide further downside protection.

On the other hand, as indicated by our technical chart, due to the crowded timeframe, there is currently limited downside potential in the market, given that the gap has already been filled. Any downward movement can only occur if prices are forced to rise to the supply zone around $88.00 before any significant decline, followed by continued broad-ranging fluctuations to the upside.

If the current buying interest revives, the bulls may test the recent resistance level of $87.20. Overcoming this obstacle, the bulls may aim for the September support-turned-resistance level of $88.20. In terms of trading strategy, it is recommended to follow a high-selling, low-buying approach based on the technical chart.

Trading Direction: Short

Entry Price: 88.20

Target Price: 82.00

Stop Loss: 89.20

Valid Until: 2023-10-20 23:55:00

Support: 85.97, 85.36, 82.71

Resistance: 87.92, 89.14, 90.85