U.S. Dollar dropped to its lowest level in over a year on Wednesday, as data showed a slowdown in U.S. Consumer Price Inflation (CPI) for June. This suggests that the Federal Reserve may only need to raise interest rates one more time this year.  

As a result, gold surged by over 1%, and oil prices reached a two-month high, with Brent crude futures hitting a new high since May. 

Gold>>

Gold jumped over 1% on Wednesday as U.S. June CPI data revealed the lowest inflation rate in over two years. Despite hawkish remarks from Federal Reserve officials Bostic and Kashkari, the U.S. Dollar index continued to decline, attracting investor attention to spot gold as a safe-haven asset, leading to a strong rally. 

Following the release of the U.S. June CPI data, spot gold swiftly rose by $20 to reach a high of $1954.79. Supported by the level of $1933, gold experienced a robust ascent, breaking through the high close at $1940. 

During the Asian and European sessions, it made a slight breakthrough above the resistance level at $1940, then retreated under pressure and subsequently rallied again in response to the CPI news.  

With the stimulus from the data, the resistance at the $1940 level was easily breached, leading to a rapid push toward the $1950 level before a minor pullback to around $1940.  

Following the breakthrough, a new phase of consolidation began, and the upper limit of the rebound in the evening session is expected to be in the range of $1960 to $1965. 

Technical Analysis: 

For short-term trading in gold today, the main strategy is to focus on buying during pullbacks, with selling on rebounds as a secondary approach.  

• Key resistance levels to monitor in the short term are around 1965-1970. 
• Key support levels to monitor in the short term are around 1935-1930. 

WTI Crude Oil>>

Oil prices benefited from the decline of the U.S. Dollar to a two-month low, with Brent crude futures reaching a new high since early May, surpassing $80 per barrel for the first time. The U.S. Energy Information Administration (EIA) lowered its forecast for U.S. crude oil production this year.  

Optimistic demand expectations and supply cuts by major oil-exporting countries have contributed to the strong upward momentum in oil prices. During Wednesday’s U.S. trading session, WTI crude oil traded near $75.7 per barrel and remained stable. 

The EIA has revised its forecast for U.S. crude oil production in 2023 by 50,000 barrels per day. Previously, the Organization of the Petroleum Exporting Countries (OPEC) and its allies in the OPEC+ alliance announced an extension of the production cut agreement until the end of 2024.  

The EIA expects global demand to exceed supply by approximately 100,000 barrels per day in 2023 and by over 200,000 barrels per day in 2024.  

The International Energy Agency (IEA) stated that the oil market will remain tight in the second half of 2023, driven by strong demand from emerging economies such as China, coupled with recent supply cuts announced by major exporting countries like Saudi Arabia and Russia. 

On Wednesday, oil prices continued their bullish and strong upward trend. After a slight retreat during the Asian-European session, prices found support near the $74.7 level and experienced a powerful rally by the bulls, breaking above the $75.2 level in the afternoon and closing near the $76 level. 

Technical Analysis: 

For short-term trading strategies today, it is advisable to focus on buying on pullbacks and selling on rebounds.  

• Key resistance levels to watch in the upper range are between 77.0 and 77.6. 
• Key support levels to monitor in the lower range are between 74.5 and 74.0. 

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