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Analysis | Commodity Technical Analysis | Written by HY Markets | Wed Jan 04 17 23:25 ET


Spot gold surged to its highest in four weeks amid dollar's weakness, ending the day at $1,163.09 a troy ounce, holding on to gains after the release of soft FOMC Minutes. Helping the bright metal was the decision of Chinese government to raise Yuan's key reference rate, in attempt to steam capital outflows, and after the currency fell to its lowest in six years. The daily chart for the commodity shows that, while the price is still below the 23.6% retracement of its latest daily fall at 1,173.10, it advanced further above a flat 20 SMA. In the same chart, the Momentum indicator has lost upward potential but consolidates well above its mid-line, while the RSI indicator heads north at fresh over one-month highs, supporting the case for another leg higher. In the 4 hours chart, technical indicators head higher within positive territory, whilst the 20 SMA offers an immediate dynamic support at 1,157.80. In this last chart, however, a bearish 200 SMA contained the advance, currently at 1,163.90.

Support levels: 1,157.80 1,145.60 1,136.45
Resistance levels: 1,163.90 1,173.10 1,182.90


After flirting with the 52.00 level at the beginning of the day, US WTI futures settled at $53.07 a barrel, more on a technical rebound from the critical support than anything else. Ahead of the release of US inventories, market's expectations are of a 1.7 million barrels decline, supporting the positive sentiment towards the commodity. OPEC member Kuwait also lifted prices, after its state-owned oil producer said it would cut output in the first quarter, in line with the output cut agreed with other OPEC's members. The recovery however, was not enough to confirm additional gains ahead from a technical point of view, as in the daily chart, technical indicators continue hovering within neutral territory, whilst the intraday rally stalled right below a bullish 20 DMA. Shorter term, and according to the 4 hours chart, the upward potential also seems limited as the price remains below its 20 and 100 SMAs, whilst technical indicators have turned horizontal right below their mid-lines.

Support levels: 52.60 51.90 51.40
Resistance levels: 53.40 54.20 55.00


US stocks opened higher, maintaining the positive tone all through the day and ending the session in the green, with the Dow still en route to 20,000. The DJIA advanced 60 points or 0.30% to end the day at 19,942.16, whilst the Nasdaq Composite added 47 points, to close at 5,477.01. The S&P also advanced, up by 0.57%, to 2,270.75. Retailers and financials led the advance, with Nike again being the best performer, up by 2.22%, followed by American Express that closed 1.65% higher. The moderate intraday advance left the DJIA above its 20 SMA after trading below it for most of the week, whilst technical indicators in the daily chart are heading modestly higher within positive territory, still well below past week's highs. Shorter term, and according to the 4 hours chart, the risk is now towards the upside, as the Momentum indicator accelerated north above its 100 level, the RSI indicator consolidates around 57, whilst the benchmark holds firmly above its 20 and 100 SMAs.

Support levels: 19,878 19,820 19,758
Resistance levels: 19,942 19,980 20,045

FTSE 100

The FTSE 100 rose for a fifth consecutive day, closing at a new record high of 7,189.74, up by 11 points this Wednesday, despite some negative news from retailers sector. Next, clothing and household retailer said that it expected marketĀ“s conditions to remain challenging this year, after reporting a tepid 0.4% rise in total sales in the two months previous to Christmas. The company plunged by 18.02%, dragging other retailers lower, as Marks & Spencer followed, down by 7.60%. Banks and mining-related shares rose, helping the benchmark to trim its early loses. Now above 7,200, the daily chart shows that the bullish tone persists, given that technical indicators north well above their mid-lines, whilst the 20 DMA has advanced further above the 100 DMA and below the current level. In the 4 hours chart, the RSI bounced from the 70 level, heading higher around 76, the Momentum indicator has lost upward strength, but shows no signs of changing course, while the 20 SMA maintains a sharp bullish slope, now around 7,135.

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


The German DAX closed the day unchanged at 11,584.31, with most broad-based European indices holding back ahead of the FOMC's Minutes release. Despite solid EU data, with inflation and growth higher in December, stocks were mixed, with Deutsche Bank sharply higher, up by 4.83%, but retailers still under pressure, as Adidas shed 2.34%, leading losers' list. Not far from the multi-month high posted on Tuesday, the daily chart shows that the 20 DMA maintains a sharp bullish slope well below the current level, while the Momentum indicator turned flat within positive territory, and the RSI remains directionless at 75. In the shorter term, and according to the 4 hours chart, the technical picture is neutral-to-bullish, as the Momentum indicator lacks directional strength within positive territory, whilst the RSI indicator advanced, now around 62, as the index holds above its 20 SMA.

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

HY Markets


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