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Analysis | Commodity Technical Analysis | Written by HY Markets | Sun Feb 05 17 23:17 ET


Spot gold recovered the ground lost in the previous week and closed last Friday at$1,219.00, its highest settlement since past November, backed by a neutral FED that gave no clues on upcoming rate hikes. Adding to gold's positive momentum is increasing global economic uncertainty and the continued unwind of the so-called "Trump-trade," as the new US administration failed to provide policies leading to a stronger economic expansion in the world's largest economy. On the contrary, the protectionist policies announced so far, indicate trade trouble ahead. Gold's daily chart shows that the Momentum indicator heads modestly higher above its 100 level, but that the RSI indicator accelerated its advance, standing now around 64, whilst the price settled above the 20 and 100 DMAs, both around 1,204/10, all of which supports additional gains. Around 1,230.00, the pair has the 50% retracement of the November/December slide, and an extension beyond it will probably indicating a steeper advance for this upcoming week. In the 4 hours chart, technical indicators are heading higher well above their mid-lines, whilst the 100 SMA converges with the 38.2% retracement of the mentioned decline at 1,204.50, providing a strong support in the case of downward move.

Support levels: 1,211.56 1,204.50 1,196.10

Resistance levels: 1,225.23 1,231.10 1,241.35


Crude oil prices advanced within range this past week, with West Texas Intermediate crude futures settling at $53.84 a barrel. The commodity remains trapped between positive news of output cuts within the OPEC, and negative ones that show that US production keeps increasing. Gains at the end of the week, however, were triggered by news that the US will impose sanctions to Iran after the country performed a ballistic missile test launch. WTI closed the day pretty much unchanged on Friday, holding near the upper end of its latest range with a neutral-to-bullish bias in the daily chart, given that the price stands above all of its moving averages that anyway lack directional strength, whilst technical indicators hover within positive territory, also without clear momentum. In the shorter term, the 4 hours chart the 20 SMA heads modestly higher, moving away from the 100 and 200 SMAs, while the price is above all of them, but technical indicators have turned lower within positive territory, indicating limited buying interest at current levels.

Support levels: 53.20 52.65 52.00

Resistance levels: 54.30 55.10 55.70


Wall Street surged on Friday, with the Dow Jones Industrial Average settling at 20,071.46, up by 186 points or 0.94%, boosted by news that President Trump began working to curb financial regulations, by undoing parts of the Dodd-Frank reforms of the banking industry. The Dow settled lower for the week anyway, by 0.11%. The Nasdaq Composite added 30 points and closed at 5,666.77, whilst the S&P finished at 2,297,42, up 0.73%, both modestly up weekly basis. Financial stocks led the way higher, and within the DJIA, Visa was the best performer, up by 4.59%, followed by Goldman Sachs, up by 4.57% and JP Morgan which added3.06%. Nike was the worst performer, down 0.83%. Technically, the daily chart for the Dow shows that the index is not far from the record highs set last January, well above a flat 20 DMA, but far above a bullish 100 DMA, whilst technical indicators have bounced from their mid-lines, maintaining strong upward slopes ahead of Monday's opening. In the 4 hours chart, the moving averages converge at 19,900, the Momentum indicator maintains its bullish slope, while the RSI consolidates at 65, all of which maintains the risk towards the upside, favoring a new leg higher on a break above 20,080, Friday's high.

Support levels: 20,031 19,975 19,923

Resistance levels: 20,080 20,141 20,200

FTSE 100

The Footsie advanced on Friday, up 47 points or 0.67% to close at 7,188.30, helped by a recovery in financial-related equities. Barclay's was the best performer, advancing by 3.39%, followed by Prudential that added 2.09%. Royal Bank of Scotland closed 2.70% higher. Gains were offset by mining-oriented equities, as metal prices fell, with Glencore topping losers' list, down 4.77%, followed by Rio Tinto that shed 3.54% and Anglo American that closed 3.30% lower. The recovery was not enough to confirm further gains ahead, as in the daily chart, the 20 SMA caps the upside at 7,128, whilst technical indicators have turned modestly higher, with the Momentum still below the 100 line, but the RSI at 56, somehow anticipating an upward extension, to be confirmed by an upward acceleration through the mentioned resistance. In the 4 hours chart, the RSI indicator turned flat at 60, the Momentum heads higher within positive territory, whilst the index is trapped within horizontal moving averages, in line with the longer term perspective.

Support levels: 7,128 7,091 7,042

Resistance levels: 7,212 7,258 7,312


The German DAX edged modestly higher on Friday, adding 23 points or 0.20% to settle at 11,651.49, bud down for the week. Stocks across Europe opened with a soft tone and traded in the red for most of the session, weighed by Chinese monetary policy's measures, but recovered alongside with Wall Street following the release of the NFP report. Continental was the best performer, up by 3.81%, followed by Deutsche Bank that added 2.68%. Heidelberg Cement topped losers' list, down 1.21%. The daily chat shows that the index has been confined to a tight range during the second half of this past week, turning technically neutral, as the index is stuck around a horizontal 20 SMA, whilst indicators are flat around their mid-lines, lacking directional strength. In the 4 hours chart, the index is between its 100 and 200 SMAs, both within a 50 points, range, the RSI indicator is horizontal around 48, while the Momentum aims modestly higher around its 100 level, also lacking technical clues on what's next for the index.

Support levels: 11,609 11,550 11,000

Resistance levels: 11,711 11,770 11,804

HY Markets


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