WTI & Brent Crude Bearish: Real Drop or Fakeout? | US Indices, Gold & Silver Outlook

Good day, Team GCI.

Two days ago, the price of crude oil fell based on good news about the Saudi pipeline that helps the flow of crude oil.

However, aggression still persists in the region, especially on tankers in the Strait of Hormuz, so prices rose again.

Is this technical drop real?

I’m Brad Alexander, and in today’s Market Outlook, let’s take a look at Forex trading on Silver, XAGUSD, Gold, XAUUSD, EURUSD, AUDUSD, the Dow Jones Industrial Average, the S&P 500, WTI and Brent Crude Oil.

Just a reminder that these videos are intended as observational and educational, and are not to be considered as trading advice.

From the technical perspective, we see price action in a downward channel, with price at the upper trend line and falling.

The stochastic oscillator is overbought and crossing down.

Other technical analysis is available, of course, and you can look for confirmation of a downtrend with the Parabolic SAR, for example.

If we see dots above, we may consider this as bearish confirmation.

But, as we know, this is more of a fundamental trade than a technical trade.

After the UN General Assembly and aggressive speeches by both the US and Iran, both sides want to return to peace talks and, if true, this should relieve traffic in the Strait of Hormuz, thereby lowering the price of crude.

You would think that the US administration would like to see lower crude prices just 5 weeks before the midterm elections.

We have shown before how the high price of crude oil negatively impacts the Dow Jones Industrial Average.

Now, we have 2 more problems: inflation will cause the US Fed to raise rates, and the US 5-year Treasury bonds have moved to their highest rate since 2007.

All these factors make equity investments less attractive for investors, so indices fall, like this on the S&P 500, partially erasing gains from renewed tech enthusiasm.

These factors are also creating a strong USD, and we can see on the daily charts just what is happening.

We are watching certain pairs closely, like EURUSD where price action is falling to a key level at around $1.135.

AUDUSD is of interest as the RBA is expected to raise interest rates next week, and we saw a bull run all through July and August.

And, of course, Gold where we still see price falling as USD gets stronger, in a descending triangle.

We see support at just above $4,250.

And, as we can see, that level perfectly aligns with the 61.8% Fibonacci level.

Silver is not following gold right now as we see price action in a symmetrical pennant.

We will be watching this to see if price breaks these trend lines or support or resistance.

That’s all for now.

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