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Analysis | Commodity Technical Analysis | Written by HY Markets | Mon Mar 20 17 00:25 ET


After a 2-week decline, gold prices recovered this past one, with spot settling at $1,229.05 a troy ounce, up 2.4% for the week, underpinned by Fed's decision to maintain its rate-hike pace unchanged, which weakened the greenback against all of its major rivals. The bright metal consolidated on Friday, holding within the upper end of Thursday's range, but unable to breach the weekly high of 1,233.62, somehow indicating fading buying interest. In the daily chart, the commodity closed the day around a horizontal 20 DMA and slightly below a major Fibonacci resistance at 1,230.10, whilst technical indicators have lost upward strength, although the RSI stands at 54, this last limiting the bearish potential. In the 4 hours chart, the 20 SMA maintains a strong bullish slope below the current level, whilst technical indicators hold within overbought territory with no signs of turning lower, in line with the longer term perspective.

Support levels: 1,223.15 1,212,90 1,203.30

Resistance levels: 1,230.10 1,242.50 1,250.65


Crude oil prices posted a modest gain this last week after reaching fresh 2017 lows, with West Texas Intermediate futures ending at $48.69 a barrel after trading as low as 47.08. The commodity pared losses after the US weekly EIA report posted a surprise drawdown after 9 straight weeks of advances, although the recovery was contained by continued fears of further gains in US production, after Friday's Baker Hughes report. According to the oilfield company, the number of active US rigs drilling for oil rose by 14 to 631, the ninth consecutive weekly gain and the highest number of active drills since September 2015. The daily chart shows that WTI developed below the 200 DMA all the week, failing to surpass it, whilst the 20 DMA heads sharply lower above the current level, after crossing below the 100 DMA. Furthermore, technical indicators in the mentioned time frame have turned flat within oversold territory after correcting extreme readings, all of which maintains the risk towards the downside. In the 4 hours chart, the price is stuck around a modestly bullish 20 SMA, whilst technical indicators head nowhere within neutral territory. A downward extension below 48.00 will likely result in a deeper slide beyond the mentioned weekly high, and leaving doors open for a test of the 45 threshold.

Support levels: 48.00 47.30 46.65

Resistance levels: 49.10 49.75 50.50


Wall Street closed mixed once again last Friday, with major indexes not far from their daily opening levels. The Dow Jones Industrial Average lost 20 points and settled at 20,914.62, while the S&P shed 3 points, to close at 2,378.25. The Nasdaq Composite closed flat at 5,901.00. The Dow momentum faded as investors struggle to digest monetary and political news, following Fed's decision and Donald Trump's fiscal 2018 budget proposal, which put forth massive cuts throughout the federal government. Financial and health care stocks led the decline, and within the Dow, Goldman Sachs was the worst performer, down by 1.72%, followed by JP Morgan that shed 1.05% and UnitedHealth Group which lost 0.93%. The best performer was 3M that gained 1.08%. Despite closing the week modestly higher, the Dow daily chart presents an increasing bearish potential, as the index is barely holding above a horizontal 20 DMA, while the RSI indicator retreated further from overbought readings and the RSI indicator entered bearish territory with a strong downward slope. In the 4 hours chart, the index is stuck around its 20 and 100 SMAs, both converging in the current 20,910 level, whilst technical indicators pose a modest bearish potential, turning south around their mid-lines.

Support levels: 20,890 20,852 20,817

Resistance levels: 20,925 20,978 21,015

FTSE 100

The FTSE 100 advanced 9 points or 0.12% on Friday, to close the week at 7,424.96, its second consecutive record close and after extending its rally to a new intraday record high of 7,447. The advance was limited by Pound's strength. Insurance firm Admiral was the best performer, adding 1.94%, followed by ConvaTec Group that gained 1.88%. Royal Bank of Scotland was among the best performers, advancing 1.37%, following upbeat comments from Natixis analysts. Mining-related equities were off the radar as metals consolidated on Friday, while Old Mutual was the worst performer, down 2.38%. The index retains its positive tone in the daily chart, as it continued developing well above moving averages, whilst technical indicators remain within positive territory, although with limited upward momentum. In the 4 hours chart, the upside remains constructive, as the 20 SMA maintains a strong bullish slope below the current level, whilst technical indicators have turned north within positive territory, favoring a new leg higher on a break above the mentioned high.

Support levels: 7,399 7,363 7,338

Resistance levels: 7,447 7,480 7,510


European equities posted modest gains last Friday, with the German DAX ending the week at 12,095.24, up on the day by 12 points, but the week at its highest since April 2015, with sharp losses in automobile stocks offsetting other sectors' gains. E.ON was the best performer within the DAX, closing 4.83% higher, followed by Commerzbank that gained 1.54%. Deutsche Bank was the worst performer, down 2.13%, followed by Volkswagen that shed 1.45%. The daily chart shows that the index held above a bullish 20 DMA, currently at 11,973, but that technical indicators have lost their upward momentum, turning flat within positive territory, indicating easing bullish strength, but not enough to suggest an upcoming downward move. In the 4 hours chart, technical indicators have also turned neutral within positive territory, whilst the index holds above all of its moving averages, with the shortest now providing an immediate dynamic support at 12,037.

Support levels: 12,039 11,977 11,932

Resistance levels: 12,105 12,140 12,178

HY Markets


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