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Analysis | Commodity Technical Analysis | Written by HY Markets | Wed Feb 15 17 23:37 ET

GOLD

Spot gold bounced sharply from a daily low of 1,216.64, ending the day around $1,231.60 a troy ounce. The recovery was limited, as US data released this Wednesday backed Yellen's Tuesday comments about being risky to wait too long to raise rates, as inflation pressures are increasing. Dollar bulls rushed to take profits after the currency reached some critical levels against its major rivals, resulting in a strong intraday reversal that anyway is not enough to confirm an interim top. In the case of stop gold, the daily chart shows that the price bounced sharply after testing its 20 DMA, still advancing below the 100 DMA, whilst technical indicators are attempting to recover after a modest downward correction from overbought readings. In the 4 hours chart, the price is slightly above a flat 20 SMA whilst technical indicators head higher around their mid-lines, with limited upward strength. While further gains are not technically confirmed the risk of a bearish move seems well-limited according to technical readings, with only a break below the 1,200 level indicating a steeper decline afterwards.

Support levels: 1,221.80 1,210.10 1,200.00

Resistance levels: 1,237.10 1,244.70 1,252.90

WTI CRUDE

West Texas Intermediate crude oil futures closed flat for a second consecutive day a few cents above $53.00 a barrel, as large US stockpiles builds dented optimism about OPEC's output cut. US crude stocks rose 9.5 million barrels according to the EIA, much more than the 3.7 million expected, while gasoline stockpiles rose by 2.8 million barrels, also far beyond market's expectations. A decline in distillate stocks and crude oil imports partially offset the headline reading. Technically, the daily chart maintains the neutral stance seen on previous updates, with the price still stuck around a flat 20 SMA and technical indicators heading nowhere around their mid-lines. In the 4 hours chart, the price is trapped within horizontal moving averages, the Momentum indicator is flat below its 100 level, whilst the RSI indicator has turned south around its mid-line. Overall, the fundamental background favors a bearish extension, but it will take a break below 52.60 to confirm such move, with WTI then poised to test the key 50.00 figure.

Support levels: 52.60 52.00 51.40

Resistance levels: 53.70 54.40 55.20

DJIA

The positive momentum of US equities sent the three major indexes to all-time highs for a fifth consecutive session, with the Dow Jones Industrial Average adding 107 points to close at 20,611.58. The Nasdaq Composite added 36 points, to end at 5,819.44 whilst the S&P settled at 2,349.25, up 0.50%. The unstoppable rally was fueled by comments from US President Trump, who reaffirmed a massive tax reform will come in the "not-too-distant future." Banks were again among the best performers, with JP Morgan Chase up 1.15% and Goldman Sachs adding 0.47%. The DJIA daily chart shows that technical indicators keep heading sharply higher, despite being in extreme overbought territory, with the RSI indicator at 81, whilst the index is far above a bullish 20 DMA, a reflection of the ongoing buying fever. In the 4 hours chart, the technical picture is quite alike, with the RSI indicator still heading north around 87, the Momentum barely retreating within extreme overbought readings and the benchmark far above bullish moving averages. As long as optimism about upcoming policies aimed to boost growth and inflation in the US persist, equities will continue rallying, despite whatever extreme readings indicators mark.

Support levels: 20,609 20,552 20,506

Resistance levels: 20,650 20,700 20,750

FTSE 100

The FTSE 100 closed at 7,302.41, up by 33 points or 0.47%, with the banking sector leading the way higher across the region. The index reached an almost one month high, further fueled by a weakening Pound. Ashtead Group was the best performer, up 3.20%, followed by Barclays that added 2.97%. Standard Chartered gained 2.66% while Royal Bank of Scotland closed 2.07% higher. The mining sector ended mixed, with BHP Billiton up 2.90%, but Antofagasta down 1.98% and Anglo American closing 1.03% lower. The index retains the bullish tone in its daily chart, holding above a flat 20 SMA and with technical indicators heading north within positive territory, still poised to retest the record high posted last January at 7,354, now the immediate resistance. In the 4 hours chart, the index is well above a bullish 20 SMA, but the Momentum indicator continues diverging lower within positive territory, whilst the RSI lost upward strength in overbought territory, none of them enough to confirm a bearish move, but acting as an immediate warning over a possible correction.

Support levels: 7,296 7,254 7,208

Resistance levels: 7,354 7,390 7,425

DAX

European equities closed with modest gains, with the banking sector leading the way higher following hawkish comments made by Federal Reserve Chairwoman Janet Yellen. The German DAX added 22 points or 0.19% to close at 11,793.93, with Deutsche Bank leading gainers' list, up 2.06%. Commerzbank added 2.01%. The German benchmark advanced to a fresh 3-week high of 11,848, and despite the lack of clear momentum coming from technical readings, sentiment favors a bullish extension for the upcoming days. In the daily chart, the DAX continues developing above a horizontal 20 DMA, but far above bullish 100 and 200 DMAs. Indicators in the mentioned chart are flat, with the Momentum around 100, but the RSI at 62, supporting the bullish case. In the 4 hours chart, the 20 SMA continues advancing below the current level, with an approach to it having been quickly reverted, whilst technical indicators are aiming higher after correcting overbought conditions reached earlier this week.

Support levels: 11,745 11,694 11,640

Resistance levels: 11,848 11,891 11,935

HY Markets
http://www.hymarkets.com

 

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