FXStreet notes that Brent crude oil completed a bullish “triangle” continuation pattern in Q2 as well as breaking the key 2019 and 2020 highs at $71.75/95 also suggesting we are seeing a much larger, longer-term base. Therefore, strategists at Credit Suisse stay bullish with the next resistance at $75.60.

“We stay bullish with resistance seen next at $75.60, above which can reinforce a broader basing story for our original bull ‘flag’ target at $79.10, then the aforementioned ‘measured triangle objective’ at $82.50.”

“Bigger picture, above here can expose the 2018 high at an even more distant $86.74 next, which we expect to cap the market at least temporarily.”

FXStreet notes that gold strength in Q2 has been capped ahead of the key $1959/66 highs for the year and late 2010 and the subsequent move lower has seen the market break back below the 200-day average. Strategists at Credit Suisse believe that this leaves the immediate risk lower in the broader consolidation range heading into Q3.

“Below support at $1765/55 would warn of a fall back to the YTD lows and 38.2% retracement of the entire 2015/2020 bull trend, but with this expected to remain a solid floor. A closing break lower though would warn of a more damaging downturn, with support seen next at the 50% retracement at $1561.”

“Gold has arguably overshot the move in Real Yields, however, we continue to look for 10yr US Real Yields to rise to retest their highs seen earlier this year, which would suggest XAU/USD is likely to stay under pressure in its range and the USD continues to hold key supports and is seen under pressure to rise, at least in the short-term, which should also prove a headwind for the yellow metal.”

FXStreet reports that Art Woo, Senior Economist and Director Economics at the Bank of Montreal, said that with WTI piercing US$70/bbl, the chatter of $100 oil has picked up steam. 

“Beyond higher-than-expected prices, we think another key development that is working in OPEC+’s favour is the fact that the recovery in US crude oil production has remained muted to date.” 

“We wonder if OPEC+ would be truly comfortable letting crude oil prices run significantly higher despite the obvious economic benefits of greater export dollars and fiscal revenues. Indeed, crude oil prices, if sustained, have already reached levels that would push many key OPEC+ members’ budgets back into surplus.”

“Letting oil hit $100 or $90, particularly on a sustained basis, would also surely increase the viability of some U.S. production shut in last year. Moreover, there is the risk that higher prices could fast-forward the move to renewable energies (i.e., electric vehicles). As a result, there is a possibility that OPEC+ could begin to unwind its production cuts a little more aggressively despite a potential return of Iranian production.”