This preview of weekly data examines USOIL and XAUUSD, with economic data expected later this week as the primary market drivers of the near-term outlook. 

Highlights of the week: US PPI, Fed & Bank of England’s interest rate decision, British unemployment, and ECB rate decision

Tuesday

  • Reserve Bank of Australia Interest rate decision at 3:30 AM GMT is expected to increase from 3.85% to 4.10%. If this is confirmed, it would be the first rate hike since November of 2023 and could create some gains for the Aussie against its pairs. 

Wednesday

    • U.S. Producer Price Index (PPI) at 12:30 GMT. Market participants are expecting the figure to come in at 0.3%, down from 0.5% in the previous reading. If this is confirmed, then it could hint at lower inflation figures in the coming months.
    • Bank of Canada Interest rate decision at 13:45 GMT is expected to remain stable at 2.25%. A surprise hike in interest rates would support the loonie in the short term, while an unlikely rate cut might create some turmoil for the currency.
  • The Fed interest rate decision at 18:00 GMT is broadly expected to remain steady at 3.75%, with the probability of a cut below 1%. Participants are closely focusing on what the central bankers will say in the subsequent press conference to get hints about the future direction of monetary policy.

Thursday

  • Bank of Japan Interest rate decision at 03:00 AM GMT. The market consensus is that the rates will remain static at 0.75%, and any shift away from this figure will most certainly create volatility in the yen pairs.
  • British unemployment at 07:00 AM GMT for January is expected to hold steady at 5.2%, while the claimant count is expected to decrease to 24,500 in February, down from 28,600 in the previous month.  
  • Bank of England interest rate decision at 12:00 PM GMT. The general expectation is that the central bank will hold its rate stable at 3.75%, but in the event that we witness another rate cut it could put some pressure to the quid in many of its pairs, especially against the US dollar whereas in the unlikely event of a hike it might give some support on the British pound in the aftermath of the release.
  • ECB Interest rate decision at 13:15 GMT. The market consensus is that the European Central Bank will keep the rates stable at 2.15%. If there is a surprise rate hike, then the Euro might find support against other major currencies, while a cut might create some losses in the short term. Investors and traders are rather focused on the subsequent press conference following the release, which will focus on getting possible insights on the monetary policy steps ahead.

USOIL, daily

Oil prices climbed as tensions in the Middle East escalated after a second attack on the Port of Fujairah, a major oil export hub near the Strait of Hormuz. Oil loading at the port was suspended while damage was assessed following the strike, which further disrupted shipments from the UAE’s main export route. At the same time, the United States carried out strikes on Kharg Island, the key terminal for Iran’s oil exports. The International Energy Agency says the conflict has already caused the largest supply disruption in global oil market history, with shipping through the Strait of Hormuz largely halted. Governments are responding by releasing strategic reserves, including a record 400-million-barrel release coordinated by the IEA, while the United States and Japan begin distributing part of their emergency stockpiles to help offset supply shortages.

 On the technical side, crude oil found sufficient support at the 38.2% monthly Fibonacci retracement level and has since corrected to the upside. Currently, it is testing the $100, which combines the psychological resistance of the round number with the 61.8% Fibonacci level. The Stochastic oscillator is not indicating any overbought or oversold conditions, suggesting the recent bullish correction could continue into the upcoming sessions, while the moving averages are still validating the overall bullish trend in the market. The overall picture, at least from a technical perspective, suggests a rather bullish short-term outlook for crude oil, as there are no major signs of a significant bearish correction just yet. 

Gold-dollar, daily

Gold has been volatile as the war involving the United States, Israel, and Iran continues. Prices briefly fell before stabilizing, supported by a weaker dollar but pressured by rising oil prices and inflation concerns. The conflict is disrupting energy markets, with shipping through the Strait of Hormuz largely halted. Recent US strikes on Kharg Island, Iran’s main oil export hub, and ongoing attacks on regional energy infrastructure have increased fears of prolonged supply disruptions. Higher energy prices are also raising inflation risks and reducing the likelihood that the Federal Reserve will cut interest rates soon. While this limits gold’s upside in the short term, ongoing geopolitical tensions and stagflation risks could still support the metal over the longer run.

From a technical point of view, gold tested lower around $5,000, where, for the time being, this level is a major technical support area comprising the 38.2% daily Fibonacci retracement level, the lower band of the Bollinger Bands, and the 50-day simple moving average. At the same time, the Stochastic oscillator is in extreme oversold territory, suggesting a near-term bullish correction. This might take some time, since volatility seems to be running low ( as shown by the contracted Bollinger Bands); therefore, it might take some time before any significant moves show up on the gold chart. The sideways move that has been ongoing since early March seems to be the dominant scenario for the next few days, if no significant catalyst comes into play, so the boundaries of $5,000 and $5,200 might be the major support and resistance areas, respectively.  

Disclaimer: The opinions in this article are personal to the writer and do not reflect those of Exness or Finance Feeds.