Federal Reserve Chair Powell’s congressional testimony on Wednesday did not meet the market’s hawkish expectations. He expressed support for a more moderate pace of interest rate hikes. As a result, the U.S. dollar index experienced a notable decline, while gold prices rebounded significantly from their lows. 

Gold>>

The U.S. dollar index continues to face downward pressure, nearing the key level of 102.00, while spot gold has rebounded from its lows and is currently hovering around $1935 per ounce. 

After Federal Reserve Chair Powell concluded his congressional testimony, the U.S. dollar index sharply declined from its peak of 102.72, reaching a low of 102.02, the lowest level since May 12^th.  

At the same time, spot gold experienced a significant rally from $1918.91 per ounce, reaching $1932.08 per ounce and further climbing towards the range of $1935 per ounce. 

Technical Analysis: 

• Key resistance levels to watch are around 1945-1950. 
• Key support levels to watch in the short term are around 1920-1925. 

WTI Oil>> 

On Wednesday, international oil prices rebounded after two consecutive days of decline. The rally was fueled by the surge in U.S. corn and soybean futures to multi-month highs, which raised expectations of a global grain supply shortage that could lower biofuel blending ratios and increase oil demand.  

Additionally, Federal Reserve Chairman Powell’s suggestion that the Fed is nearing the end of its policy trajectory led to a decline in the U.S. dollar against a basket of global currencies, further bolstering oil prices. 

The weakened dollar also made dollar-denominated oil more attractive to investors holding other currencies, thereby boosting demand.  

Furthermore, data released today by the American Petroleum Institute (API) showed a decrease in U.S. crude and distillate inventories, while gasoline inventories rose.  

During the week ending June 16^th, crude oil inventories dropped by approximately 1.2 million barrels, gasoline inventories increased by around 2.9 million barrels, and distillate inventories decreased by about 300,000 barrels. 

The early morning session of the WTI crude oil market opened at $70.67 per barrel. The prices slightly declined to $70.61 per barrel, but later experienced volatile fluctuations and climbed higher towards the closing session.  

The daily high reached $72.54 per barrel, and the market closed at $72.23 per barrel. The closing candlestick formed a bullish pattern with a long upper shadow, indicating a continuation of the bullish sentiment for crude oil today. 

Technical Analysis: 

Considering the pullback layout, the focus is primarily on long positions, with short positions as a secondary option. 

• The key resistance levels to watch in the short term are $73.9 – $74.5 per barrel. 
• The key support levels to watch in the short term are $71.5 – $70.8 per barrel. 

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