Oil's Key Resistance Test: A Pivotal Friday Following US Inflation Surprises

Oil's Key Resistance Test: A Pivotal Friday Following US Inflation Surprises
As we gear up for Friday's trading activities, it's vital to reflect on the previous day's significant market shifts and anticipate the upcoming data releases set to shape the day.
Thursday truly served as a focal point of the week, with the U.S. inflation data and unemployment claims taking center stage. The anticipated inflation growth from 3% to 3.3% came slightly short at 3.2%. Moreover, the unemployment claims exceeded predictions, coming in at 248,000 against the anticipated 231,000. Such data releases, particularly the inflation figures, play a vital role in setting the tone for market sentiment and can impact trading strategies and investment decisions.

Turning our attention to Friday, the economic docket seems relatively full. One of the highlights to watch is the UK's GDP data, which analysts have pegged at a growth rate of 0.2%. Moreover, market participants will be closely monitoring the U.S. producer's inflation (PPI), anticipated to show an uptick from 0.1% to 0.2%. The day and the week will culminate with the Prelim University of Michigan Consumer Sentiment, which is forecasted to see a decline to 71.4.

On the charts, several instruments continue to display intriguing patterns. The EURUSD has retraced from the 1.105 resistance, further cementing its bearish sentiment. Meanwhile, the American dollar, in its dance with the Japanese yen, seems to have successfully breached the mid-term downtrend, showing strong buy signals. Its interplay with the Canadian dollar paints a positive picture as it maneuvers within the symmetric triangle post a double bottom formation. However, the NZDUSD, is treading on thin ice, having broken the uptrend and hitting new monthly lows.

Indices from Thursday reveal a trend that traders should be wary of. The NASDAQ's slip below the 15,250-point benchmark is a point of concern, while the Dow Jones is hovering dangerously close to its 34,500-point support. The DAX, with its shooting star candle, suggests that a retest of the 15,700-point support might be on the cards.

In the commodities realm, both gold and silver seem to be treading bearish territories as they edge closer to their respective monthly lows. Brent oil's recent touch and retreat from the $88 per barrel resistance level indicates sellers hold the current upper hand. Likewise, WTI's trajectory suggests a potential downturn, echoing sentiments of a false breakout above its $83 mark.
In conclusion, as we navigate Friday's trading landscape, being armed with insights from Thursday and a keen eye on anticipated data releases will be crucial. The current chart patterns and market sentiments offer a roadmap for traders and investors to strategize their moves effectively.
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