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Analysis | Commodity Technical Analysis | Written by HY Markets | Mon Jul 17 17 04:41 ET


Gold prices recovered strongly on Friday, ending the week up on poor US data that cooled down expectations of firm tightening in local monetary policy. Spot gold settled at $1,228.23 a troy ounce, recovering from a 4-month low of 1,204.75 set at the beginning of the past week. The recovery took off some of the downward pressure over the bright metal, but it's still not enough to confirm an interim bottom ahead of further recoveries, as in the daily chart, selling interest rejected the advance around a bearish 20 DMA, at 1,232.80, while technical indicators barely managed to recover some ground, still well below their mid-lines. Shorter term, and according to the 4 hours chart, the upward potential also seems limited, as spot was unable to surpass a strongly bearish 100 SMA, whilst technical indicators turned lower within positive territory. In this last time frame, the 20 SMA provides a dynamic support at 1,220.70, with a break below it favoring a bearish extension for this Monday.

Support levels: 1,216.60 1,208.30 1,199.20

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


Crude oil prices recovered ground this past week, and West Texas Intermediate futures settled at $46.67 a barrel, up 5.2%. A broadly weaker dollar helped the commodity advance, as fears over an oversupply market persist, as the Baker Hughes report released on Friday showed that the number of active US rigs drilling for oil increased by 2 to 765. Backing the commodity were news indicating supply issues in Nigeria, with a pipeline shutdown. Daily basis, WTI presents a modest positive tone, with the price above its 20 SMA, the Momentum indicator lacking directional strength, but within positive territory, and the RSI indicator heading north around 57. In the same chart, however, the 100 DMA heads lower around the 61.8% retracement of the latest daily fall around 48.20, while the commodity topped around the 50% retracement of the same slide in the precious week around 47.20, prize zones where selling interest will likely appear. In the 4 hours chart, the upside is favored, with technical indicators heading higher within positive territory and the 20 SMA having surpassed its 100 and 200 SMAs below the current level.

Support levels: 45.90 45.20 44.60

Resistance levels: 47.20 47.70 48.20


Wall Street surged to record highs on Friday, boosted by poor US data on speculation that it will force the Fed to ease its tightening bias. The Dow Jones Industrial Average and the S&P settled at record highs, with the first up 84 points to 21,637.74 and the second adding 0.47% to 2,459.27. The Nasdaq Composite added 11 points, to close the day at 2,459.27. Financial equities were the worst performers in the country, on earning reports. JPMorgan reported much better-than-expected second quarter earnings, but the bank lowered its net interest income forecast for the year, while Wells Fargo also beat on earnings, but revenues were below expectations. Finally, Citigroup also reported good results for Q2, but the bank reported a slowdown in its trading results. Within the DJIA JP Morgan was the worst performer, down 0.91%, while Wal-Mart led advancers, up 1.72%. Technically, the Dow daily chart shows that the index settled far above all of its moving averages, with the RSI indicator heading north around 67, and the Momentum lacking directional strength within positive territory. In the 4 hours chart, technical indicators eased modestly within overbought territory, whilst the 20 SMA surged above the largest, acting as dynamic support some 100 points below the current level. The index traded as high as 21,682 intraday, the immediate resistance and the level to break to open doors for an extension towards 22,000 this upcoming week.

Support levels: 21,628 21,576 21,531

Resistance levels: 21,682 21,735 21,780


The FTSE 100 closed at 7,378.39, down 0.47% or 34 points last Friday, despite the strong performance of mining-related equities, as a resurgent Pound weighed on its export-oriented components. Anglo American was the best performer, adding 2.10%, while Fresnillo and Randgold Resources added over 1%each, also making it to the top ten list. Barratt Developments led decliners with a 2.50% loss, followed by Royal Mail that shed 2.43%, after presenting a new pension proposal, while the company with a "sell" rating. Technical readings in the daily chart favor the downside, as the index settled a few points below a bearish 20 DMA, whilst technical indicators resumed their declines after failing to surpass their mid-lines. In the 4 hours chart, the index is below its 100 and 200 SMAs and around a bullish 20 SMA, whilst technical indicators hover within positive territory, without clear directional strength, failing to provide directional clues.

Support levels: 7,362 7,333 7,304

Resistance levels: 7,413 7,439 7,482


The German DAX closed 9 points or 0.08% lower on Friday at 12,631.72, as European equities were weighed down by the poor performance of the banking sector, hit my earning reports from their overseas counterparts. In Germany, Commerzbank led decliners with a 1.10% lost, followed by Bayerische Motoren that shed 1.06%. Volkswagen led advancers, up 1.08%, followed by BASF that added 0.92%. The pharmaceutical sector advanced, which helped limiting losses. Despite Friday's slide, the index closed sharply up for the week, but presents a neutral stance according to technical readings, given that in the daily chart, the index stands a few points above a modestly bearish 20 DMA, while technical indicators hold flat around their mid-lines. In the 4 hours chart, the 20 SMA heads sharply higher below the current level, but the index continues hovering around directionless 100 and 200 SMAs, whilst technical indicators lack directional strength, but hold well above their mid-lines. The index topped last week at 12,677, now the immediate resistance and the level to break to see further gains during the upcoming sessions.

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

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

HY Markets


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