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Analysis | Commodity Technical Analysis | Written by HY Markets | Fri Jan 06 17 00:21 ET


Gold prices continued advancing this Thursday, with spot up to a fresh 5-week high of $1,184.86 a troy ounce. The bright metal closed the day around 1,181.70, gathering pace from a weaker dollar and a slide in US stocks, following FED's Minutes which included the word "uncertainty" fifteen times, tripling previous statement's number, and clearly indicating that policymakers fear upcoming Trump's decisions. Strong data coming from China also supported commodities,  as the latest PMI showed steady signs of growth in the second world's largest economy.  In the daily chart, gold has settled above the 23.6% retracement of the post-US election decline, a strong static support now at 1,173.10. Also, and in the same chart, technical indicators maintain their strong upward slopes near overbought readings, whilst the 20 DMA has lost its bearish slope and stands flat now around $40.00 below the current level. In the shorter term, the metal presents a bullish bias, as the price has broken above all of its moving averages, whilst the 20 SMA is about to surpass the 200 SMA after already crossing above the 100 SMA, and technical indicators hold within overbought readings, pausing their advance, but far from indicating upward exhaustion.

Support levels: 1,179.20 1,173.10 1,165.20
Resistance levels: 1,184.90 1,191.30 1,200.00


West Texas Intermediate futures advanced for a second consecutive day, settling at $53.74 a barrel. The advance was supported by the weekly EIA report, showing that crude inventories fell by 7.1 million barrels in the week through December 30th, against expectations of a 2.2 million barrels decline. Gasoline and distillate stockpiles, however, rose sharply with the first up by 8.3 million barrels and the second rising by 10.1 million barrels. The bad news represented by the sharp gain in oil products, was offset by news coming from Saudi Arabia, as the country is expected to cut oil output in January by at least 486,000 bpd, in line with the latest agreement. The daily chart shows that the commodity continues trading in the red weekly basis, but above a now flat 20 DMA, whilst technical indicators aim modestly higher within neutral territory, lacking enough strength to confirm further gains ahead. In the 4 hours chart, the price settled a few cents above its 20 and 100 SMAs, both flat around 53.30, whilst technical indicators head lower, the Momentum below its 100 level and the RSI at 54, in line with the longer term perspective.

Support levels: 53.30 52.60 51.90
Resistance levels: 54.20 55.00 55.75


Wall Street fell the pain on a weaker greenback, with major indexes closing mixed. The Dow Jones Industrial Average lost 42 points, to settle at 19,899.29, while the S&P shed 0.08%, to end at 2,269.00. The Nasdaq Composite, however, closed at a new record after adding 0.20%, to 5.487.94. Weak US employment data dented investors' mood ahead of the release of the NFP report, while the poor performance of retailed added pressure to stocks. The daily chart for the DJIA shows that the index closed barely above its 20 SMA, whilst the Momentum indicator is flat around its 100 level and the RSI indicator retreats from overbought readings, now around 64, limiting the upward potential. In the 4 hours chart, however, the index presents a modest positive tone, with indicators bouncing from their mid-lines, but below previous daily highs, whilst the benchmark holds around its 20 and 100 SMAs, both flat within a tight 20 points range. The index presents a strong static resistance in the 19,940 region, as advances have been steadily rejected from it ever since the week started. It will take a clear acceleration above it to see the benchmark rallying towards the 20,000 region.

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

FTSE 100

The Footsie continued rallying to fresh all-time highs this Thursday, closing at 7,195.31, 5 points or 0.08% higher amid a rally in home builders and mining-related stocks. House builder Persimmon was among the best performers, closing up 7.18% after announcing that private sales in the second half of the year were up 15% from a year earlier. Fresnillo added 10.43%, while Randgold Resources closed up 4.28% and Glencore gained 1.91%, backed by a strong recovery in gold prices. Holding around 7,200, the daily chart shows that the modest advance resulted in technical indicators losing their upward potential, although they hold near overbought readings. In the same chart, the 20 DMA maintains a strong upward slope below the current level and moving further above the 100 DMA, maintaining the risk towards the upside. In the 4 hours chart, technical indicators lack directional strength but hold within positive territory, whilst the 20 SMA advanced further below the current level, now offering a dynamic support around 7,156.

Support levels: 7,156 7,118 7,089
Resistance levels: 7,225 7,260 7,300


The German DAX closed flat for a second consecutive day at 11,584.94, as attention centered in mining-related equities this Thursday. The index has rallied to a fresh over two years high this week, before entering a consolidate phase that extends into the end of the week. Deutsche Post was the best performer, up by 1.84%, whilst Deutsche Bank topped losers list, down by 2.12%. The DAX gapped lower at the opening, as the FED Minutes released late Wednesday spurred some risk aversion, but the index trimmed its daily losses after positive EU data opposed to poor US figures. From a technical point of view, the daily chart shows that the Momentum indicator keeps heading lower within positive territory, whilst the RSI consolidates around 74 as the 20 SMA heads north below the current level. In the 4 hours chart, the index maintains a neutral stance, holding a few points above a modestly bullish 20 SMA and with the Momentum indicator heading nowhere around its mid-line.

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

HY Markets


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