During Tuesday's (March 26th) Asian session, WTI oscillated narrowly, and it is now trading at 81.8.

Yesterday, oil prices rebounded as we expected, reaching 82.2. Then, it retraced a bit and closed the daily chart higher.  The main driving factor comes from the news side. Russia said it will cut the crude oil production to 9 million bpd, which is 500,000 bpd lower than the current 9.5 million bpd. Previously, Iraq and Kazakhstan, which produce more crude oil than the requirements, have also confirmed to expand production cuts to meet their quota. These will support oil prices and are positive signals of OPEC+ production in the second quarter. Besides, the bearish sentiment will be boosted and another supportive factor comes from the geopolitical risks. From an overall perspective, under a tight supply, crude oil is expected to remain resistant to decline and will move at a high level. However, as a large gap does not emerge, the supply side is difficult to push up oil prices, and an improvement in demand is necessary. Crude oil will stay on an upward trend only when both sides improve together. In the short term, crude oil will keep moving in the previous channel, and we should catch the opportunity to buy low and sell high.

News: UN Security Council resolution 2728, adopted yesterday, called for an immediate ceasefire in the Gaza Strip during Ramadan. 14 Council members voted in favor of the draft resolution, while the U.S. decided to abstain while it voted for 4 times previously. Although the U.S. representative claimed that the Security Council resolution 2728 is non-binding, it also illustrates that although the ceasefire is the general trend, it's just that the U.S. still doesn't want to give up on Israel. And in his subsequent statement, the Chinese representative emphasized again that the UN Security Council resolution is binding. Here, I believe that this is certainly binding, as the Russian-Ukrainian conflict did not further escalate, and there will be a short-term negative impact on oil prices. After the supply sentiment fades, WTI will then turn weaker.

Today's focus: Crude oil inventory data, investors should focus on the latest situation of terrorist attacks in Russia.

WTI crude oil was strong yesterday. Before, it closed lower for 3 consecutive days and ended with a doji star, showing a technical improvement. However, the retracement was insufficient as the lowest level was 80.4. Besides, it reached 82 above as expected, and a bullish piercing signal appears again. Today, WTI should move under a strong trend, but we should note that the resistance area 83.3, where the top of the previous channel, will be a short-term obstacle. If WTI crude oil arrives at the resistance area, it will be a chance to short.

Technically, oil bulls dominated yesterday and it oscillated upward. In the 1H chart, MACD forms a golden cross and expands, and the bullish momentum will fade after yesterday's appreciation. Thus, we should be careful of a decline today, and stop chasing the rising trend. Regarding the 4H chart, MACD forms a golden cross and expands, and the bullish momentum exists from a larger cycle. Therefore, we can keep going long after a retracement. In the daily chart, WTI ended the decline for 3 days and showed a bullish piercing signal. However, MACD may form a death cross at any time, and WTI is difficult to grow further. Moreover, WTI is at the upper area of the channel below, and the space above is limited. Our attention should be on the resistance in the range of 83-83.5, and we should go short at highs compared to chasing the upward trend. The trading range is 80.5-83.3 today, where investors can buy low and sell high.

Trading direction: Short

Entry price: 83.300

Target price: 80.500

Stop loss: 83.800

Support: 80.500/79.500

Resistance: 82.000/83.300

On Monday, WTI prices in the US session began to rise after experiencing volatile trading during the European and Asian sessions, closing up 1.44%, with concerns on the supply side remaining the main driving force.

Russia has stated it will reduce crude oil production to 9 million barrels per day (bpd) by the end of the second quarter, a decrease of about 500,000 bpd from the current production of 9.5 million bpd. Previously, both Iraq and Kazakhstan, whose production exceeded the reduction requirements, have also indicated they will increase cuts to comply with their reduction requirements. The OPEC+ reduction situation is evidently in the process of gradually improving market expectations, which boosts market sentiment. Additionally, geopolitical disturbances have played a role in exacerbating oil price volatility.

After Ukraine launched drone attacks over the weekend, Russia's Kuibyshev oil refinery suspended one of its two main refining units, halving its production capacity. This marks the eighth production interruption at Russian refineries in the past three weeks. The latest attack is anticipated to further decrease the refinery's output by 35,000 bpd, resulting in a total reduction in excess of 400,000 bpd outside of regular maintenance.

Presently, while the US gasoline crack spread exhibits seasonal strength, other regions' gasoline and diesel crack spreads lack notable performance indicators, and demand-side activity fails to generate positive momentum for crude oil. Oil prices have been in a high-price range, and relying solely on the supply side may not sustain the strong performance of crude oil over the long term. Subsequent attention needs to be paid to changes in the demand side of the oil market. In the context of tight supply, it is expected that oil prices will maintain a high-level volatile pattern.

In the 4-hour chart, WTI is generally within an upward channel, with a key resistance level at $83.17. This level has repeatedly impeded crude oil's upward movement during the wide-ranging oscillations from November 2022 to August 2023. Additionally, it closely aligns with the upper limit of the upward channel in the daily chart. If WTI stabilizes above this level, it will initiate a new upward trend. The critical support level below is at $80.40, representing the recent low. Breaking below it would signal a potential end of the current upward momentum, breaking the existing high-level volatile pattern and officially entering a corrective phase.

In terms of indicators, within the Ichimoku Cloud, the conversion line (Tenkan-Sen) has rapidly ascended and is currently entangled with the baseline (Kijun-Sen), with both moving sideways. There are indications that the price is converging towards these lines, suggesting a potential short-term decline in WTI prices. Meanwhile, in the DMI, the ADX line is slightly descending, indicating a weakening downward momentum for WTI. However, both the positive (+DI) and negative (-DI) directional indicators are declining, with -DI below 18.1, suggesting that WTI may experience a short-term decline followed by a rebound.

Trading Direction: Long

Entry Price: 81.24

Target Price: 83.17

Stop Loss: 80.20

Support: 81.24, 80.757, 80.40

Resistance: 81.791, 82.273, 83.170

Since the beginning of this year, due to the market expectation that the central banks of major countries in Europe and North America will cut interest rates in Q2, the geopolitical situation caused by the Russian-Ukrainian war and the Palestinian-Israeli conflict in the Middle East has continued to be tense, and the international crude oil price has risen steadily in the shock, with an increase of more than 12% in 2024.

This trend has continued recently. Last week, the Swiss National Bank unexpectedly became the first one to cut interest rates, which may accelerate the opening of a new round of easing cycle in the world. At present, the voice of European and North American central banks to cut interest rates in June is very high, which will help boost the economy and stimulate the demand for crude oil consumption.

At the same time, concerns from the supply side are also growing. There is still no hope of a ceasefire in the Middle East. The recent terrorist attacks in Russia have caused serious casualties, which has escalated geopolitical tensions. The energy infrastructure of Russia and Ukraine has been attacked by each other, which may also disrupt the production and export of crude oil and fuel.

In addition, Russia is committed to fulfilling its commitment to OPEC+ production reduction, and the Russian government has ordered oil companies to cut production to 9 million barrels per day in Q2. OPEC will hold a new round of policy meetings next week, and Saudi Arabia may also extend its voluntary additional production reduction plan of 1 million barrels per day. Due to these supply and demand factors, crude oil prices may rise further, and bulls should be prepared.

In the 4H timeframe, WTI continued to fluctuate upward. Although it was slow, it also got rid of the major 80 resistance level. After short-term adjustment, it is expected to continue the uptrend. If the oil price breaks through 83, the next resistance level may appear around 86. On top of this, the hope of hitting the major 90 level will also increase greatly.

It is recommended to go long at the lows. At present, we can wait for the price to retrace and stabilize at around 81.2 before going long, with the initial target set at around 86 and a stop loss set at below 80.

Trading direction: Long

Entry price: 81.2

Target price: 86.0

Stop loss: 79.7

Support: 81.0/80.0

Resistance: 83.0/86.0

During the Asian session on Tuesday (March 26), spot gold fluctuated in a narrow range and is currently trading around 2170. 

Yesterday, the released US new home sales unexpectedly fell in February, with median home prices hitting a two-and-a-half-year low. At the same time, US officials were confident that US inflation would come down, especially as the momentum of rising housing prices will slow. Expectations of interest rate cuts dominated the market during the day. And the pullback in the US dollar index supported a slight rebound in gold prices. The market is more cautious generally. At present, the bulls' chips are geopolitical risks and easing background, while the bears' slight weakness is more dependent on the short-term technical overshoot after the rate cut during the year is fully priced. This state of affairs may remain in place for some time before the next event triggers the market. However, the current bears will also be potential longs in the future. All it takes is an opportunity or a full chance of a correction. Therefore, the support is still strong, but at the same time, there is a lack of buying to chase the market, which also limits the upside.  

In the Asian session, gold rebounded to 2181.2 at the highest level yesterday, then retreated to 2170, and finally closed at 2171.5. Our strategy was trading in the range of 2145-2180, and short orders at 2180 slightly took a profit of $8 again.

Data: US new home sales fell 0.3% MoM in February, with expectations for a 2.1% MoM increase. The previous month was up 1.5% MoM. New home supply climbed to 463,000 units in February, which is the highest level since October 2022. The median price of new homes in February was $400,500, down 7.6% YoY.

News: Several senior Fed officials talk about interest rate cuts: Governor Lisa Cook stressed caution. This year, the Atlanta Fed president reiterated that he expects to cut interest rates only once this year. Chicago Fed President Austan Goolsbee made it clear that he still supports three interest rate cuts this year.

Today, traders need to focus on the US durable goods orders for February, the consultees' consumer confidence index for March, and the FHFA home price index for January.

Yesterday, gold prices were volatile, with the Asian market opening higher, and then falling back. At the beginning of the American market, gold prices rose again to 2181, followed by oscillations and downwards, and finally closed a small bull candle. It can be seen that yesterday the bulls held the support near 2165, and the overall volatility space was acceptable, with an amplitude of $18 throughout the day. However, spurred on by the risks over the weekend, it is clear that the upside is not ideal. After a long period of rally, the weakness of gold prices is gradually revealed. Perhaps, investors need to think seriously about whether gold prices are going to start repairing technical indicators.

Yesterday, the analysis was correct, the gold price was bullish generally. Although there was no violent surging, it has at least held the key support position in the short term and avoided turning weak. However, it should be noted that after energy storage, gold prices will inevitably have to choose between the bulls continuing to pull up and the pullback to repair. For now, the market is more inclined to the latter. In the 1-hour candlestick chart, the MACD tends to form a death cross near the 0 axis. In addition, as gold prices are under pressure below the MA60, short-term bullish momentum is insufficient. If the MA60 cannot be broken quickly, gold may have to see an hourly correction. Support is initially in the 2155-2160 area. For further support, it could look at the range of 2135-2140. In the 4-hour candlestick chart, the MACD formed a death cross and showed signs of widening, which indicates weak gold prices in the future. However, because the gold price is also attached to the MA60, there may be less room for short-term oscillations. Yesterday, gold prices rebounded in the daily chart and closed with a bull candle. However, the MACD formed a death cross in the absolute overbought area, with a widening opening, and the indicator began to repair, which largely limited the upside of gold prices. Traders can continue to trade in a narrow range towards gold prices. During the day, aggressive traders can buy low and sell high in the range of 2146-2182.

Trading Direction: Short

Entry Price: 2182

Target Price: 2146

Stop Loss: 2187

Support: 2165.000/2150.000

Resistance: 2188.000/2195.000

After several days of consecutive gains, stocks showed relatively muted performance last Friday. Major indices fluctuated throughout the trading session, ultimately closing mixed.

The Nasdaq Composite Index edged up by 26.98 points, a 0.2% increase, to a record closing high of 16,428 points; the S&P 500 Index slightly declined by 7.35 points, a 0.1% decrease, to 5,234 points; and the Dow Jones Industrial Average (DJIA) fell by 305.47 points, a 0.8% decrease, to 39475 points.

Despite the mixed performance on the day, major indices recorded significant gains throughout last week. The Nasdaq Composite Index rose by 2.9%, the S&P 500 Index increased by 2.3%, and the DJIA rose by 2.0%.

According to the Financial Times, China has introduced new guidelines to gradually phase out Intel processors from government personal computers and servers, putting pressure on the stock prices of Intel and AMD.

As part of a movement to replace foreign technology with domestic solutions, stricter government procurement guidelines also aim to exclude Microsoft's Windows operating system and foreign-made database software in favor of domestic products.

Meanwhile, the Fed's forecasts provided during last week's monetary policy announcement indicate that Fed officials still expect three interest rate cuts this year.

Atlanta Fed President Raphael Bostic, who previously anticipated two rate cuts, has now revised down his expectations to one cut for this year, a move that could generate some negative sentiment.

Market Outlook: Last week, all three major US stock indices hit historical highs twice, a first in nearly three years, but several factors may stifle the current trend. Firstly, the surge was driven by artificial intelligence, with the "Magnificent Seven" stocks accounting for a significant portion of market capitalization, but this trend may not be sustainable.

According to Dow Theory, a true bull market begins when one Dow average—Industrial or Transportation—breaks a previously important high and is accompanied by the other average doing the same. However, this has not occurred. The DJIA has risen by 4.7%, while the Dow Jones Transportation Average is down 6% from its 2021 peak.

Moreover, according to FactSet data, the earnings forecast for the S&P 500 index for this year is expected to rise to $242.49 per share, showing no significant change from the January forecast of $241.17 per share, despite the index rising by 9.7%. These expectations face downward risks in the second half of the year, weakening the market momentum.

And finally, the Fed can also spoil this party. Even a soft landing, if the market is caught off guard, could trigger a minor correction.

As investors anticipate the release of key economic data in the coming days, overall trading activity in the first half of this week may weaken. Investors may focus on reports on durable goods orders, consumer confidence, and pending home sales, although a report on personal income and spending, including what is purportedly the Fed's preferred inflation data, will be released when the market is closed.

With the Fed yet to cut interest rates, the DJIA continued to hit new highs last week, a trend that may persist. However, we may see more corrections this week as Dow futures are currently down by over 104 points before the opening bell. With the trading week shortened due to the "Good Friday" holiday, lower volatility is expected this week.

As the stock market continues its bearish correction today, it may present an opportunity to add more long positions. In this scenario, prices could potentially break through the first resistance level at 40,178.

On the support side, the first support level at 39,186 serves as retracement support, reinforcing its importance as a key support level.

If the bearish correction continues deeper, then 39,000 points and the 50-day SMA will become bearish targets.

Trading Direction: Long

Entry Price: 39160

Target Price: 40178

Stop Loss: 38000

Valid Until: 2024-04-08 23:55:00

Support: 39083, 38916, 38775

Resistance: 39535, 39883, 10178

After the conclusion of the Fed's monetary policy meeting last Wednesday, gold prices surged to historical highs above $2,222. However, the strong rally was short-lived as prices quickly retreated back to neutral territory, a trend that continued into Friday's trading session.

The recent rapid uptick in gold prices is attributed to the downward shift in real interest rates caused by market expectations of Fed rate cuts and robust global central bank demand for gold. Simultaneously, geopolitical tensions have been the most significant driver behind the recent rapid ascent in gold prices.

The next focus will be on the gold-buying actions of global central banks, with the most crucial indicator being the change in holdings by the People's Bank of China in March, which is a significant gauge for future market sentiment.

The latest weekly gold survey indicates a divergence in market sentiment towards gold price movements entering the final week of the first quarter, with caution prevailing among traders while retail traders are back on the bullish trend. Their views are evenly distributed, with six analysts (40%) expecting gold prices to rise this week, four analysts (27%) predicting a decline, and five experts (33%) foreseeing sideways trading or suggesting a wait-and-see approach.

Meanwhile, an online poll received 170 votes, with the majority of investors expecting gold prices to rise further this week. 117 retail investors (69%) anticipate a rise in gold prices this week, while 25 respondents (15%) predict a decline, and 28 respondents (16%) remain neutral on the near-term outlook for gold prices.

Looking ahead to this week, Monday will see the release of new home sales data, Tuesday will feature durable goods, consumer confidence index, and Richmond Fed survey data, and Wednesday will unveil MBA mortgage applications. However, Thursday, due to the Easter long weekend, will be the busiest day of the week, with the release of final fourth-quarter GDP data, initial jobless claims, pending home sales data, and the University of Michigan consumer sentiment index. Stronger-than-expected report data might provide some support for the US dollar and weigh on gold priced in dollars.

From a technical standpoint, there hasn't been a significant correction in the market, and the majority of patterns still indicate bullish sentiment. Nonetheless, the current gold price is in dire need of mean reversion. Technical indicators were overbought when gold approached the $2,200 level, and it must be observed how it develops over the coming weeks.

Since March 7, the market has been trading within a narrow range of $2,146 to $2,195, with technical oscillators confirming a weakening trend. The MACD remains below the trigger line well above the zero level, while the RSI has gradually declined after climbing to the 70 level.

The rapid correction following the recent high indeed confirms either the asset's strength being short-lived or simply a "peak." We believe a healthy adjustment in gold prices may occur before the end of the month.

If the market sees further declines, it may touch the consolidation floor at $214, then the 20-day SMA at $2,130. Further downward movement would test the range of $2,088 to $2,100.

Overall, gold prices are exhibiting neutral short-term behavior, but there may be signs of a reversal in the medium term.

Trading Direction: Long

Entry Price: 2168

Target Price: 2220

Stop Loss: 2138

Valid Until: 2024-04-08 23:55:00

Support: 2162, 2157, 2145

Resistance: 2180, 2186, 2195