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Analysis | Commodity Technical Analysis | Written by HY Markets | Sun Mar 12 17 23:49 ET


Spot gold ended the week at $1,204.26 a troy ounce, sharply lower for a second consecutive week. The commodity bounced from a fresh multi-week low of 1,194.94 achieved early Friday on hopes the US Federal Reserve will raise rates as soon as this Wednesday. The recovery was triggered by bargain buying aligned around 1,200.00, later extending on news ECB´s Government Council discussed how to begin the process of tapering its facilities' programs. The daily chart shows that the commodity pared losses after nearing the 50% retracement of its December/January advance at 1,193.00, while also managed to settle above a bearish 100 DMA after briefly falling below it, this last at 1,197.10. In the same chart, technical indicators have pared losses, but the Momentum indicator holds well below its 100 level whilst the RSI indicator stands at 35, both indicating that further gains are still unlikely. The immediate resistance is the 38.2% retracement of the mentioned advance at 1,209.50. In the 4 hours chart, technical indicators corrected extreme oversold conditions, now heading higher, but within bearish territory, whilst the 20 SMA maintains a strong bearish slope right above the current level, indicating a limited upward scope at this point.

Support levels: 1,197.10 1,188.20 1,180.50

Resistance levels: 1,205.60 1,214.20 1,221.70


Crude oil prices extended their decline last Friday, with West Texas Intermediate futures settling at $48.37 a barrel, its lowest since November 2016. The black gold was weighed by the continued advance in US production, confirmed on Friday after the Baker Hughes report showed that the number of active rigs drilling oil rose for an eight consecutive week. The US added eight rigs to a total of 617, the highest since September 2015. Earlier in the week, the EIA reported that US crude stockpiles rose to 528.4 million barrels, the highest since record keeping began in 1982. From a technical point of view, US crude is set to decline further, given that in the daily chart, it broke below all of its moving averages, now below the 200 DMA for the first time this year, whilst technical indicators maintain their sharp bearish slopes, despite being in oversold territory, with the RSI indicator currently at 21. In the 4 hours chart, the 20 SMA has turned sharply lower, but still lags price action, currently at 50.50 while technical indicators have turned flat within oversold territory, rather reflecting the limited volume at the end of the week than suggesting downward exhaustion.

Support levels: 48.00 47.30 46.65

Resistance levels: 48.80 49.50 50.10


Wall Street closed in the green last Friday, with the Dow Jones Industrial Average up by 44 points, to 20,902.98, down for the week by 0.5%. The Nasdaq Composite added 23 points, and closed at 5,861.73, while the S&P ended at 2,372.60, up by 7 points. A strong US employment report was offset by falling oil prices, as the commodity trimmed its early gains and settled at fresh multi-month lows. Among the Dow, General Electric led advancers, adding 2.09%, followed by UnitedHealth Group that closed 1.17% higher. Boeing led decliners, shedding 1.04%, while Exxon Mobile closed 0.07% lower. Goldman Sachs also closed in the red, down 0.72%. Dow's daily chart shows that the index continues challenging, but holding, above a bullish 20 SMA, at 20,825, whilst technical indicators have extended their declines within positive territory, with the Momentum indicator nearing its 100 level, and the RSI still around 65. In the 4 hours chart, the index battles around a modestly bearish 20 SMA, but bounced from a bullish 100 SMA whilst technical indicators remain stuck around their mid-lines, indicating some consolidation rather than confirming an upcoming leg lower.

Support levels: 20,825 20,777 20,738

Resistance levels: 20,915 20,978 21,045

FTSE 100

The FTSE 100 pared losses, advancing for the first time in the week on Friday, up 28 points to 7,343.08. The index found support in energy-related shares that closed higher as oil prices recovered at the beginning of the day, although the commodity later plunged, anticipating some negative developments for this Monday. BT Group was the best performer, adding 3.71% after the company announced it will make its Openreach division a legally separate company. Oil company BP added 3,68%, whilst Royal Dutch Shell gained 1.35%. Among mining-related equities, Glencore advanced 1.16% after S&P upgraded its rating on the share, although Randgold Resources was among the worst performers, closing down 1.30%. The daily chart shows that the benchmark has managed to recover above a still bullish 20 DMA, whilst the Momentum indicator has bounced modestly from its 100 level and the RSI indicator turned higher, now around 61, not enough to confirm further advances. In the shorter term and according to the 4 hours chart, the technical stance is positive, but limited, as the index held above a still bearish 20 SMA whilst technical indicators aim higher, coming from oversold levels, but still within neutral territory.

Support levels: 7,332 7,306 7,262

Resistance levels: 7,397 7,420 7,450


European equities opened the day with a strong footing, but trimmed all of their daily gains on news indicating that the ECB discussed a rate hike in their latest meeting. EU policymakers discussed possible exit strategies from their ongoing stimulus program, although no decision was made on the matter. The German DAX traded as high as 12,067 before turning south, ending the day down by 15 points at 11,963.18. Financials led the way higher, with Commerzbank leading advancers with a 5.57% gain, followed by Deutsche Bank that gained 2.31%. Leading decliners was Vonovia that closed 1.85% lower. The index remains within a consolidative stage, with a limited bearish scope, given that in the daily chart, it develops above a bullish 20 DMA, currently at 11,909, whilst technical indicators head modestly lower within positive territory, not enough to confirm a bearish continuation. In the 4 hours chart, the index has settled a few points below a modestly bearish 20 SMA, whilst technical indicators are aiming to bounce from their mid-lines, in line with the longer term perspective.

Support levels: 11,909 11,857 11,819

Resistance levels: 12,018 12,067 12,100

HY Markets


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