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Analysis | Commodity Technical Analysis | Written by HY Markets | Thu May 18 17 06:23 ET

GOLD

Gold prices rallied to fresh May highs, with spot settling at $1,257.89 a troy ounce after flirting with 1,260.20 earlier in the day, as US political woes escalated to the point that US president Trump is near an impeachment, boosting demand for the safe-haven metal, as attention is now far from Central Bank's decisions. The commodity has broken above all of its moving averages in the daily chart that anyway remain flat, as the movement was quite abrupt, whilst technical indicators turned sharply higher, entering positive territory and suggesting a possible upward extension for the upcoming sessions, moreover if the political turmoil persist. In the shorter term, the 4 hours chart also favors additional gains, as technical indicators have barely pulled back within overbought territory before losing downward strength, whilst the price has settled above all of its moving averages, with the 20 SMA accelerating north, but still below the larger ones.

Support levels: 1,255.10 1,245.20 1,237.40

Resistance levels: 1,262.10 1,273.10 1,282.90

WTI CRUDE OIL

Crude oil prices recovered the ground lost on Tuesday, supported by better-than-expected market's news. West Texas Intermediate crude futures settled at $49.00 a barrel, after the EIA reported yet another decline in US crude inventories. Official figures showed that stockpiles fell by 1.8 million barrels in the week ended May 12th, the sixth consecutive weekly drop. Gasoline stockpiles also declined, by 400K barrels, while distillates fell by 1.9 million barrels. The US benchmark traded as high as 49.48 intraday, stalling its recovery below previous' weekly high of 49.64, as speculators are not fully convinced that this news will be enough to reduce the ongoing worldwide glut, neither latest OPEC comments pointing for a possible extension of their output cut deal until March 2018. Technically, the risk is however towards the upside, as in the daily chart, technical indicators have quickly turned north, still standing around their mid-lines, whilst an early decline met buying interest around a now horizontal 20 SMA, currently at 47.90. Shorter term, the 4 hours chart shows that indicators lack directional strength, with the Momentum stuck around 100, but the RSI aiming to regain the upside around 60 and the price holding above a bullish 20 SMA, all of which supports additional gains particularly on an advance beyond the mentioned weekly high.

Support levels: 48.70 47.90 47.20

Resistance levels: 49.65 50.20 50.80

DJIA

It was a bad day for equity traders, particularly for those in the US as the Dow Jones Industrial Average closed the day at 20,606.93, down by 372 points, while the Nasdaq Composite shed 2.57% or 158 points, to end at 6,011.24. The S&P fell by 43 points or 1.82%, to 2,357.03. It was the worst day for US indexes in this 2017, as the continuity of US President trump is close to be put on question, following the scaling scandals around inter-relationships with Russia. Within the Dow, financial-related equities suffered the most, with Goldman Sachs down 5.48% and JP Morgan shedding 4.04%. Only 5 members closed up, with UnitedHealth being the best performer with a measly 0.49% advance. The Dow fell to its lowest since April 21st, and holds near the mentioned close ahead of the Asian opening, with a strong bearish momentum in the daily chart supporting further declines for this Thursday, as technical indicators head sharply lower near oversold territory, whilst the index is currently aiming to break below its 100 DMA. In the 4 hours chart, technical indicators maintain their bearish momentum despite having entered oversold territory, whilst the index has broken below all of its moving averages.

Support levels: 20,602 20,557 20,503

Resistance levels: 20,688 20,732 20,797

FTSE100

The FTSE 100 closed 18 points lower at 7,503.47, retreating from record highs on mounting risk aversion. Losses were limited as mining-related equities surged on gold demand, with Fresnillo being the top performer, adding 2.75% , and Randgold Resources up by 2.05%. Most members closed lower, with Ashtead Group being the worst performer by closing -3.82%, followed by CRH that shed 3.48%. The index fell further in after-hours trading heading into the Asian opening around 7,451. The Footsie trimmed most of its weekly gains, and the daily chart shows that technical indicators are pulling back sharply from overbought levels, supporting some additional declines. Still the index is holding far above bullish moving averages, keeping the longer term view far from bearish. In the short term and according to the 4 hours chart, the index is standing right around a bullish 20 SMA, whilst technical indicators present strong bearish slopes within positive territory, now approaching their mid-lines and in line with the longer term view.

Support levels: 7,435 7,402 7,363

Resistance levels: 7,476 7,500 7,533

DAX

The German DAX closed at 12,631.61, down by 170 points of 1.35%, with most European indexes falling by the most in nearly 9 months, on prospects the US president will be impeached for obstructing justice, on news indicating that he asked former FBI director Comey, before firing him, to drop the investigation on Michael Flynn. The scandals surrounding the Trump jeopardize his pro-growth agenda, forcing investors to unwind bets. Within the DAX just ThyssenKrupp managed to close in positive territory, adding 2.26%, whilst financials led the way lower, as Commerzbank shed 3.90% and Deutsche Bank 3.61%. The DAX fell further in after-hours trading, dragged lower by Wall Street's slump and currently around 12,540. The technical picture has turned bearish, as in the daily chart, the index is about to break below a bullish 20 SMA, whilst technical indicators have turned sharply lower, now pressuring their mid-lines. In the 4 hours chart, the decline accelerated below a now bearish 20 SMA, whilst technical indicators maintain their sharp bearish slopes near oversold territory.

Support levels: 12,534 12,485 12,440

Resistance levels: 12,593 12,629 12,666

HY Markets
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