Trump has sent a shiver down the spine of the entire global market system. Crude oil has not been spared. The prices of brent keep sliding alongside S&P 500 futures and the Asia Pacific stock exchanges on Monday. These new signs of US-China trade war escalation sour market-wide sentiment.
Gold prices surged as the defensive mood weighed heavily on bond yields. However, this rally rapidly stopped as haven demand affected the US dollar. It undermined the appeal of anti-fiat alternatives.
The oil market has experienced a rollercoaster in recent years. From Brexit to US sanctions on Iran to the fall of Libya, all these factors have affected the prices of Brent extensively. Looking at the future, risk trends will likely overshadow a quiet offering on the economic data front.
A revised set of Eurozone PMI data released in April takes top the spot. The data will confirm flash estimates confirming that the manufacturing- and service-sector growth dwindled after a small uptick in March. Any such outcome may dissolve into broader risk-off dynamics.
Furthermore, geopolitical complications may affect the crude oil price action on the wake of an aircraft carrier strike group deployed by the US to the Middle East. The strike was initiated to counter any would-be aggression from Iran.
John Bolton, National security adviser explained that the latest strike meant to tell Tehran that all attacks on US interests or its allies will encounter excessive force. The US is expected to hit Iran with more sanctions within the week.
Gold Technical Analysis
Gold prices currently are hovering above support in the 1260.80-63.76 area. Any tangible break below this level confirmed on a daily closing basis may overturn the recent rising trend that started from mid-August 2018. The slide would expose the next downside barrier pegged at the 1235.11-38.00 zone. The immediate resistance formed at the $1295.37 level while a break upwards will target the 1303.70-09.12 region.
Crude Oil Technical Analysis
The oil prices dropped to test the minor support at $60.39. Any break below that would expose the next support located at the 57.24-88 area. A formidable layer of resistance now extends up through $67.03. a reverse back above the barrier opens the opportunity for another challenge of the $70/bbl figure.