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Analysis | Commodity Technical Analysis | Written by HY Markets | Thu Jul 13 17 03:46 ET


Spot gold advanced for a third consecutive session to close the day at $1,220.20 a troy ounce, albeit gains were once again modest, as despite Fed's Yellen was less hawkish than expected, she confirmed the US Central Bank plans to keep on rising rates and start shrinking its balance sheet later this year. The commodity posted a daily high of 1,225.63 before retreating, and the overall outlook keeps favoring the downside, as the recovery was rejected from its 200 DMA, with technical indicators in the daily chart still heading modestly higher within negative territory, and the 20 DMA extending its slide well above the current level. In the 4 hours chart, spot met intraday buying interest around a horizontal 20 SMA whilst technical indicators lost upward momentum and turned lower, still holding within positive territory. Below 1,212.80, the risk turns towards the downside, with scope then to extend its slide pass the 1,2000 threshold.

Support levels: 1,212.80 1,204.75 1,194.95

Resistance levels: 1,225.60 1,236.50 1,242.50


West Texas Intermediate crude oil futures closed the day down at $45.50 a barrel after peaking at 46.45 on a surprise drawdown in US crude stockpiles. The EIA weekly report showed that US crude stockpiles fell by 7.6 million barrels in the week ended July 7th, with the headline sending the price higher. The report, however, also showed that total local crude production edged up by 59,000 barrels a day to 9.397 million barrels in the same week. Additionally, gasoline stockpiles fell by 1.6 million barrels, but distillate stockpiles climbed by 3.1 million barrels. In the news, the OPEC said it will hold an extraordinary meeting on July 17th. Daily basis, the commodity was unable to sustain gains beyond 46.60, the 38.2% retracement of its latest decline still trading above a flat 20 SMA but far below bearish 100 and 200 SMAs, whilst technical indicators have turned lower, lacking clear directional strength right above their mid-lines. In the 4 hours chart, technical indicators head north within positive territory, with the price still below a bearish 200 SMA.

Support levels: 45.10 44.60 43.70

Resistance levels: 45.90 46.60 47.25


Wall Street soared, with the Dow Jones Industrial Average reaching an all-time high and ending the day 123 points higher at 21,532.14. The Nasdaq Composite added 67 points or 1.10% to end at 6,261.17 while the S&P closed the day at 2,443.25, up 17 points. Gains were a result of Fed's Chair Janet Yellen semi-annual testimony before the Congress, as she said the Central Bank is likely to start reducing its massive $4.5 trillion portfolio sometime this year, but also that won't take much more rate hikes to reach a neutral level, providing the exact dose of confidence in the local economy, without overwhelming investors with higher rates. Within the Dow, only JP Morgan edged lower, ending the day -0.36%, while El du Pont was the best performer, up 2.89%, followed by Microsoft which gained 1.63%. The daily chart for the Dow shows that the index extended its recovery beyond its 20 DMA, whilst technical indicators aim north within positive territory, with plenty of room to extend their advances. In the 4 hours chart, the index stands far above all of its moving averages, with the 20 SMA now advancing above the 100 SMA, and technical indicators losing upward strength, retreating modestly from overbought levels.

Support levels: 21,499 21,451 21,406

Resistance levels: 21,527 21,581 21,640


London equities benefited from rising oil prices and the positive mood triggered by US Fed's Yellen among stocks' traders, as a slower pace or rate hikes usually supports demand for high-yielding assets. The Footsie added 88 points or 1.19% to settle at 7,416.93, accelerating north ahead of the close as US equities jumped to record highs. Pharmaceuticals and miners led the advance, with Mediclinic up 4.72%, followed by Burberry Group that gained 3.16% and Antofagasta that gained 3.14%. Micro Focus International was the worst performer, down 8.10%, followed by Pearson that shed 4.73%. The technical picture becomes to look more constructive in the daily chart, as the index advanced above its 20 and 100 DMAs, whilst technical indicators extended their advances, now entering positive territory. In the 4 hours chart, technical indicators began easing from near overbought levels, whilst the index is stuck around its 100 and 200 SMAs, but above a bullish 20 SMA, limiting chances of a bearish movement.

Support levels: 7,386 7,345 7,302

Resistance levels: 7,439 7,482 7,529


The German DAX closed at 12,626.58, up 192 points or 1.52%, as European equities soared after Fed's Chair Yellen cooled down expectations of more than a few rate hikes in the next few years. European indexes were already in the rise ahead of the announcement, back by energy and mining-related equities' gains. Within the DAX, only banks closed lower, with Commerzbank shedding 1.10% and Deutsche Bank down 0.72%. Automakers and pharmaceuticals were on the winning side also, but the best performer was Deutsche Post, up 2.67%, followed by Infineon Technologies that added 2.61%. The index advanced further in after-hours trading, following the lead of Wall Street, gaining upward potential in the daily chart, as the index recovered above its 20 DMA whilst technical indicators extended its advance, still below their mid-lines. In the 4 hours chart technical indicators have pared gains in overbought territory, whilst the index is now struggling around its 100 and 200 SMAs. Further gains seem likely for this Thursday, particularly if stocks' traders maintain the positive mood in Asia.

Support levels: 12,617 12,565 12,521

Resistance levels: 12,689 12,732 12,774

HY Markets


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