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Trading Short WTI (USOil) & Gold (XAUUSD)? Trading Long EURCAD.


Hey Valutraders! Have you seen the backwardation on WTI!

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I’m Brad Alexander and in this week’s Market Blast Fundamentals let’s take a look at Gold (XAUUSD), GBPCAD, EURCAD, USD Index, and WTI (US Oil).

If you don’t know what backwardation is, it’s the opposite of Contango.

Basically, Backwardation means that the Future Price is lower than the spot price which usually means that buyers expect prices to fall.

This is logical with Crude Oil due to the predicted lack of demand due to the impending global recession and continued lockdowns in China.Screenshot 2022-10-31 at 21.01.04

The spot price of WTI is called USOilCash on the Valutrades MT4 platform and is currently in the $86 range.

The January Futures contract on WTI can be found on USOilJan and the current price is lower than the Spot Price in the $85 range.

We see this as a selling opportunity on Crude Oil and we will look at this from the technical standpoint tomorrow.Screenshot 2022-10-31 at 21.01.21

This fall in Crude oil will likely affect the CAD which is showing mixed strength and weakness right now.

So, if we expect a weaker CAD, and we want to trade with the trend, we will look at pairs like GBPCAD and EURCAD and long positions.Screenshot 2022-10-31 at 21.01.34

The USD Index is rising again but not quite back to the levels of the last few weeks.Screenshot 2022-10-31 at 21.01.48

This has had the opposite effect on price action on Gold and we still have room to fall to the next key level in the $1620 area.Screenshot 2022-10-31 at 21.01.56

As you can see we have lots of economic news this week with the key item being the US Federal Reserve announcing the latest Interest Rate decision.

We expect a 0.75% rise, from the current 3.25%, which will see the USD Index rise and price action on Gold go lower.

Anything less than 0.75% should have the opposite effect.

Tomorrow we have an Interest rate decision from the Reserve Bank of Australia and from the Bank of England on Thursday.

Thanks for watching and don’t forget to subscribe to Valutrades Signals and the link will be in this video’s description below.

Also, subscribe to our YouTube channel and register on the Valutrades website to get notifications on new content as it happens.

That’s all for now.  Happy trading with Valutrades and we will see you next time.

CFDs and FX are leveraged products and your capital may be at risk.31 October 2022 Fundamentals EN TN



The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice. If such information is acted upon by you then this should be solely at your discretion and Valutrades will not be held accountable in any way.