Brent crude oil, gold and lumber hold above recent lows ahead of FOMC
Crude oil, gold and lumber stabilise ahead of Fed rate hike decision.
Brent crude oil stabilises above significant support
Brent crude oil’s second September retest of its April 2020 to September 2022 uptrend line ahead of a plethora of major global interest rate decisions this week led to it levelling out above its early September and Monday’s lows at $87.62 to $86.99.
The oil price is expected to remain below last week’s $95.19 high over the next few days, however, as traders await the US Federal Reserve’s (Fed) tightening plans and the trajectory of global growth.
Key resistance remains to be seen between the 55- and 200-day simple moving averages (SMA) and the four-month downtrend line at $97.01 to $99.95.
Slips should find initial minor support at Thursday’s $89.51 low and more significant support at its recent September lows at $87.62 to $86.99.
Gold price stabilises after its near 2 ½ year low
The gold price managed to recover from last week’s near 2 ½ year low at $1,655 per troy ounce but is currently being capped by previous support, because of inverse polarity now resistance, between the $1,681 July low and the $1,689 early September low ahead of Wednesday’s Federal Open Market Committee (FOMC) rate decision where a 75-basis point (bps) hike is expected to be seen.
Further minor resistance comes in along the minor psychological $1,700 mark and at the late July low at $1,712.
Despite its minor bounce, gold remains within a medium-term downtrend channel, defined by lower highs and lower lows, and trades around 7.5% lower than at its August peak.
Minor support below last week’s trough at $1,655 can be spotted at the late March 2020 high at $1,644.
Lumber tests breached resistance line following averted US rail strike
The price of lumber, which declined by over 65% from its March one-year high at $1,340 per thousand-feet boards, gapped higher and rose by 25% last week but has since given back all of its rapid gains as the first US rail strike in 30-years has been averted thanks to a “tentative agreement” between rail companies and unions.
The front month lumber futures contract sat on its breached March-to-September downtrend line - which now acts as a support line – for the past couple of days but is likely to soon revisit its $460 early September low as it clearly remains in a medium-term downtrend. This is because a series of lower lows and lower highs can be spotted on the daily chart.
Minor resistance can be found at the late August high close to $523.
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