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Analysis | Commodity Technical Analysis | Written by HY Markets | Sun Feb 12 17 23:50 ET

GOLD

Gold prices extended their gains this past week, with spot reaching a fresh three-month high of $1,244.67 a troy ounce, to close the week at 1,234.01, down on Thursday amid re-surging risk appetite. Despite broad dollar's strength, demand for gold remained high, amid reduced hopes of three rate hikes coming from the FED this year, with speculators foreseeing the most, two hikes one in June and one in December. Gold prices will depend much on the upcoming Federal Reserve Chair Janet Yellen semi-annual testimony before congress, with a hawkish stance probably taking gold down. From a technical point of view, the upside is still favored given that in the daily chart, the price is well above a bullish 20 DMA that crossed above a bearish 100 DMA, whilst technical indicators have advanced within positive territory, with the Momentum indicator heading north at fresh monthly highs. In the 4 hours chart, however, the price is right below a horizontal 20 SMA, the Momentum indicator retreats from its 100 level within bearish territory, whilst the RSI indicator lacks strength around 55, suggesting a break above Friday's high of 1,237.10 is required to confirm further gains.

Support levels: 1,230.00 1,219.40 1,210.10

Resistance levels: 1,237.10 1,244.70 1,255.15

WTI CRUDE

West Texas Intermediate crude oil futures closed the week unchanged at $53.85 a barrel, but off a fresh 4-week low set late Tuesday at $51.21. Oil come under pressure after the API reported a large US build of crude stockpiles, up by 14.227 million barrels and gasoline inventories 2.903 million barrels, the second highest inventory increase in the US history according to the organism. The EIA report also showed a large build of crude stockpiles, up by 13.8 million barrels, although gasoline inventories decreased by 0.9 million barrels, triggering a relief rally. On Friday, the oil rallied after the International Energy Agency reported that OPEC's cuts in January equated to 90% of the agreed reductions in output, far higher than the initial 60% compliance back in 2009 with previous OPEC's cut deal. Nevertheless, and from a technical point of view, WTI remains neutral, stuck within a well define range since early December. In the daily chart, the price is above a horizontal 20 DMA, whilst technical indicators present modest bullish slopes within neutral territory, favoring some additional gains for this Monday, but limiting by the top of the range around 55.00. In the 4 hours chart, technical indicators have retreated modestly from overbought readings, but are far from suggesting an upcoming slide, whilst the price is well above a now bullish 20 SMA, also above the 100 and 200 SMAs, in line with the longer term perspective.

Support levels: 53.15 52.50 51.80

Resistance levels: 54.10 54.70 55.35

DJIA

US equities extended their Thursday's rally, with all of the three major indexes closing the day at all-time highs. On Friday, the Dow Jones Industrial Average added 96 points or 0.48% to end at 20,269.37, while the S&P gained 0.36% to 2,316.10. The Nasdaq Composite settled at 5,734.13, up by 18 points. Stocks rallied on Trump's promises of an upcoming tax reform, and a recovery in oil prices that lifted the energy sector. Within the Dow, Caterpillar led gainers, up by 2.50%, followed by NIKE that added 1.65% and Boeing, up by 1.19%. On the losing side, Coca-Cola topped losers' list, down 1.62%, followed by Wal-Mart Stores that shed 1.53%. From a technical point of view, the upside is favored given that in the daily chart the Dow is well above a modestly bullish 20 SMA, whilst the RSI indicator heads higher around 70, with the Momentum indicator, however, diverging, neutral around its 100 line. In the 4 hours chart, the bias is firmly bullish with the index well above a bullish 20 SMA, the Momentum indicator heading north near overbought readings and the RSI hovering around 72.

Support levels: 20,228 20,157 20,090

Resistance levels: 20,297 20,350 20,415

FTSE 100

London shares got a boost from China last Friday as a better-than-expected trade surplus in the country sent mining-related equities higher, helping the FTSE 100 to add 29 points and close at 7,258.75. A weaker Pound also lifted the mood among local traders. Rio Tinto was the best performer, up 5.63%, followed by Antofagasta that gained 4.65% and Anglo American that added 4.40%. Reckitt Benckiser was the worst performer, down 2.96%, followed by Royal Bank of Scotland that lost 1.80%. The index closed at its highest in three weeks, and technical readings in the daily chart support additional gains, given that the benchmark has extended above a still flat 20 SMA, but indicators maintain bullish slopes within positive territory. In the 4 hours chart, the 20 SMA advanced to converge with the 100 SMA at 7,208, providing a strong dynamic support, while the RSI indicator consolidates at 71 and the Momentum indicator turned higher within positive territory, in line with the longer term perspective.

Support levels: 7,208 7,163 7,128

Resistance levels: 7,275 7,326 7,354

DAX

European equities closed marginally higher on Friday, with the German DAX finishing at 11,666.97, up 24 points. Despite staring the day with a strong footing, shares failed to extend the risk-appetite rally triggered by the US president on Thursday, but remained afloat on strong earnings reports released earlier in the week, and positive trade data coming from China. In Germany, banks were among the worst performers, with Commerzbank down 2.37%, leading losers' list, and Deutsche Bank down 1.35%. ThyssenKrupp was the best performer by adding 2.35%, followed by Heidelberg Cement that closed 1.58% higher. Technically, the pair presents a modest upward potential in the daily chart, as it´s just holding at the upper end of its latest range, and a few points above a flat 20 SMA, whilst technical indicator in the mentioned time frame barely aim higher within neutral territory. In the 4 hours chart, the index settled above all of its moving averages, but the 20 and 100 SMAs lack clear directional strength, whilst technical indicators have turned lower within positive territory, limiting chances of a steeper recovery as long as the benchmark is unable to advance beyond 11,720, Friday's high and the immediate resistance.

Support levels: 11,605 11,545 11,498

Resistance levels: 11,720 11,794 11,845

HY Markets
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