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Analysis | Commodity Technical Analysis | Written by HY Markets | Tue Jan 03 17 22:56 ET


Gold prices advanced to fresh 3-week highs, with spot settling at $1,159.50 a troy ounce after trading as high as 1,163.00. Gold gained at the beginning of the day, suffering a temporal setback after the DXY traded near 103.80, its highest in 14 years, but recovered ahead of the daily close as the dollar index retreated. Political woes worldwide have helped the metal bouncing late December, although hopes for three rate hikes in the US for this year dented the upward potential. The daily chart favors additional advances, as an early decline was contained by the 20 DMA, whilst technical indicators maintain their bullish slopes within positive territory, now at fresh 2-month highs. Still, the commodity needs to recover beyond 1,173.10, the 23.6% retracement of its latest decline to confirm further gains and an interim bottom. In the 4 hours chart, technical indicators have bounced from their mid-lines, maintaining their upward strength, whilst the price is developing now above a bullish 20 SMA, having met buying interest earlier in the day on a test of the 100 SMA.

Support levels: 1,153.50 1,145.60 1,136.45
Resistance levels: 1,164.00 1,173.10 1,182.90


West Texas Intermediate crude oil futures surged around 2.35% intraday to trade at $55.22 a barrel, but suffered a sudden u-turn mid American session, plummeting to 52.11 its lowest in over a week, ending the day a few cents above this last. The commodity initially fell as the dollar index surged to its highest in fourteen years, but was unable to recover, despite the index retreated, weighed by news coming from Libya, as the OPEC country, which was exempted from cutting output, has increased its production by 85,000 barrels per day and plans to ship nearly 1.9 million barrels this month. From a technical point of view, the risk has turned towards the downside, given that in the daily chart, the price has broken below its 20 DMA, whilst technical indicators are currently entering bearish territory. Still the 52.00 region has proved being a major static support and a clear break below the level is required to confirm additional declines. Shorter term, and according to the 4 hours chart, the risk is also towards the downside, as the price broke below its 20 and 100 SMAs, whilst technical indicators hold near oversold territory ahead of the Asian opening.

Support levels: 51.90 51.40 50.65
Resistance levels: 52.80 53.50 54.20


Wall Street posted a nice recovery this Tuesday, although major indexes closed off their daily highs. The Dow Jones Industrial Average closed the day at 19,881.76, up by 119 points or 0.60% and back en route to 20,000. The Nasdaq Composite added 45 points, to end at 5,429.08, whilst the S&P added 0.85%, to 2,257.83. Strong manufacturing data worldwide, alongside with advances in commodities' prices were behind US stocks' rally, as investors regained their optimism over economic improvement for this 2017. Within the Dow, Nike was the best performer, up by 2.22%, followed by Verizon Communications hat gained 2.10%. Only 4 components closed in the red. In the daily chart, the index has settled right below a bullish 20 DMA, while technical indicators hover around their mid-lines, lacking upward momentum at the time being. In the shorter term and according to the 4 hours chart, the upward potential is limited, as the index is trading between its 20 and 100 SMAs, with the largest capping the upside around 19,860, whilst technical indicators bounced from their mid-lines, but remain below previous weekly highs.

Support levels: 19,878 19,715 19,688
Resistance levels: 19,860 19,910 19,976

FTSE 100

The FTSE 100 notched an all-time record close this Tuesday, ending the day at 7,177.89, up by 35 points or 0.49%. The index traded as high as 7,213 intraday, lifter by miners after Chinese manufacturing PMI came in much better-than-expected. Pound weakness, alongside with strong UK manufacturing figures, maintained the benchmark afloat in after-hours trading. Among the best performers were Fresnillo that gained 3.69% and Glencore that added 2.90%. Banks also advanced, with Lloyds Banking Group ending the day 2.93% higher. The Footsie holds firm ahead of the Asian opening, and the daily chart shows that the index continued advancing well above its moving averages, whilst the RSI indicator heads north around 73, supporting further gains ahead. In the 4 hours chart, a bullish 20 SMA accelerated its advance far below the current level, whilst technical indicators turned flat, with the Momentum well above its 100 level and the RSI around 78.

Support levels: 7,169 7,118 7,089
Resistance levels: 7,190 7,225 7,260


European equities opened with a strong footing, but closed mixed and not far from their previous closes, with the German DAX finishing the day at 11,584.24, down by 14 points or 0.12%. The index traded as high as 11,650, its highest since August 2015 early Europe, underpinned by strong local data showing that inflation continues advancing towards 2%, while unemployment fell below expected. Banks and automakers led the advance, with Commerzbank leading winners' list by adding 3.15% followed by Volkswagen, up by 2.08%. Retailers lagged across the region, weak ahead of trading updates. Daily basis, the Momentum indicator has pulled lower after a modest advance, but the RSI maintains its upward potential within overbought territory as the 20 DMA keeps advancing below the current level, limiting chances of a bearish extension. In the 4 hours chart, the consolidative phase persists, with the index holding above a horizontal 20 SMA, the Momentum indicator heading nowhere around 100 and the RSI indicator turning modestly higher around 68, in line with the longer term perspective.

Support levels: 11,569 11,512 11,458
Resistance levels: 11,623 11,689 11,743

HY Markets


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