US Crude Oil Inventories

The Energy Information Administration’s (EIA) Crude Oil Inventories measure the weekly change in the number of barrels of commercial crude oil held by US firms. The level of inventories influences the price of petroleum products, which can impact inflation.

The last report was -5.894M barrels, better than the forecast of -1.657M barrels. Crude oil prices rose last Thursday to $79.28 per barrel. The rise in price was boosted by the winter storm, which affected many parts of the US.

The report is due Wednesday, 13 December 2022, at 19:00 GMT.

Technical Analysis Daily Timeframe

Moving Average(MA):

On the Daily timeframe, XAUUSD price was trading both above the 200 and the 50MA, showing bullish sentiment in the market.

Relative Strength Index(RSI):

The RSI line is at 58.09, showing slightly overbought sentiment. There is a strong bearish divergence seen meaning a downtrend is due.

Analysis using price action:

XAUUSD was halting at $1625.62 as it is a strong support zone. The price has been trading below 50MA and 200MA for a long time. The price formed a high at $1727.85 and also touched the 50MA. The price touched the support again in the next move but did not break out.

The buyers then entered the market and broke the previous high at $1728.63. At this phase, the market was trading above the 50MA and close to 200MA, still trading below it. The market went into a choppy phase for two trading weeks, forming no significant levels, with very few bulls entering the market with no proper control. However, the price still managed to break above the 200MA.

The current market position has a hurdle of a new strong resistance near $1807.20, which the price is trying to break. If the price breaks this resistance, it might trade up further, keeping in mind it also crossed the 200MA recently and is respecting a bullish trend line.

Nevertheless, we may also see a downside movement as there is a strong bearish RSI divergence on the daily time frame, signaling a due downtrend.

Note: Currently, XAUUSD shows strong bullish pressure.

Potential pivot points using Price Action:

This considerable resistance and support level can enter or exit when approaching future market openings.

Key Trading Recommendation

Crude oil has reached a three-week high driven by the easing of Covid restrictions in China and the US winter storms, creating a surge in demand.

Traders should refrain from entering positions during these news events since the market will have higher-than-average volatility, meaning that currencies could move in either direction without a definite trend for a short while.

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