The market was relatively quiet as it was a holiday in the US yesterday, and we are going to briefly cover the pairs that we have discussed thus far this week.

USDJPY

USDJPY Daily

Yesterday’s trading did not give much direction to USDJPY and it is still hanging on both the rising trendline and the 138.87 key support level. With trading volume remaining thin, we are expecting a slow end to the week and a potential fakeout towards the downside.

On the technical front, the price levels still hold following our analysis yesterday, with the next levels of interest situated near 135.50 and 141.50.

Tokyo released its CPI numbers last night, printing 3.6% vs 3.5% forecasted but it didn’t have a significant impact on USDJPY. Therefore, it is best to stay on the sidelines and wait for the next clue. 

Gold

XAUUSD Daily

Gold made some modest gains yesterday (+0.35%), but it was quickly wiped out by today’s price movement. As there are no important events left for this week that would impact the pair, we may be looking at a ranging market until the following week.

Under this market condition, the range trading strategy might be the best bet, with support and resistance levels at $1730 and $1765 respectively.

Crude Oil

USOIL Daily

Since our analysis on Monday, US Crude has declined even lower due to talks of G7 price caps on Russian oil, and the escalation in China’s covid situation. The commodity remained calm yesterday, again, due to lower trading activities. 

The resurgence of covid cases in China is unquestionably negative news for oil bulls. Market participants are also weighing in on the price cap and are questioning its effectiveness as the proposed price cap is in the range of $65-$70, still considerably higher than their production costs. With that being said, oil supply is not a concern now and is putting pressure on oil prices.

$77 looks to be a solid support at the moment, and we are anticipating the level to hold, at least until next week when trading volume is back. In my view, the double-top pattern really does shift the sentiment in the bears’ favor and if the level fails to hold, we might see the price touching $65.50 soon.

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