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Analysis | Commodity Technical Analysis | Written by HY Markets | Fri Aug 11 17 04:11 ET


Gold prices extended their rallies to fresh 2-month highs this Thursday, with spot ending at $1,285.00 a troy ounce after trading as high as 1,287.74. The commodity added roughly $35 during the last three days, an impressive run to safety amid escalating tensions between the US and North Korea. A softer-than-expected US producer price index backed gold's rally, as the figures weaken the case for the US Fed to raise interest rates again this year. The bullish potential remains intact, given that in the daily chart, the 20 DMA accelerated north with a strong upward slope below the current level, whilst technical indicators keep heading north, now approaching overbought territory. In the 4 hours chart, technical indicators are losing upward strength, but still holding within overbought readings, whilst moving averages gain upward strength below the current level, favoring another leg higher towards the 1,300.00 figure.

Support levels: 1,281.20 1,270.10 1,261.30

Resistance levels: 1,288.90 1,296.10 1,303.10


Crude oil prices plunged on Thursday, with West Texas Intermediate futures settling at $48.56 a barrel after trading as high as 50.20, hit by news coming from Russia, as oil producer Gazprom considers it "economically feasible" to resume production in mature fields after a global agreement among OPEC and non-OPEC expires. The news came after the OPEC announced its oil output rose by 173K barrels per day in July, suggesting that the market's glut will persist into 2018.The commodity is at the lower end of its last two-week range and looking quite vulnerable early Asia, as in the daily chart, the benchmark is pressuring its 20 SMA whilst technical indicators turned sharply lower, about to enter negative territory. In the 4 hours chart, the price broke below its 20 SMA and is currently challenging a bullish 100 SMA, while technical indicators head sharply lower within bearish territory, supporting a bearish extension for this Friday.

Support levels: 48.50 47.90 47.20

Resistance levels: 48.80 49.65 50.20


US equities had their worst day in over three months, with the Dow Jones Industrial Average down 204 points to settle at 21,844.01, its lowest since late July. The Nasdaq Composite shed 135 points and closed at 6,216.87, while the S&P ended at 2,438.22, down 1.45% or 35 points. Rising geopolitical tensions alongside with soft US PPI figures were behind the decline, with the tech sector being the worst performer. Within the Dow, only 3 members managed to close in the green, with McDonald's leading the advance, up 1.19%, followed by Coca Cola that added 0.38% following its UK associated earning report. Apple was the worst performer, down 3.19%, followed by Goldman Sachs that shed 2.26%. The index pared losses after testing its 20 DMA in the daily chart, in where technical indicators turned sharply lower, but are still within positive territory. In the 4 hours chart, technical indicators present a strong bearish momentum, despite having entered oversold territory, whilst the 20 SMA gains bearish traction well above the current level, supporting additional slides ahead.

Support levels: 21,808 21,760 21,719

Resistance levels: 21,897 21,941 21,992


The FTSE 100 shed 106 points to end at 7,389.94, its lowest close for this August. Sentiment was again behind stocks' decline while for the London benchmark, a softer-than-expected economic growth estimate, dented further local investors' mood. The Footsie shed some 50 additional points in after hours trading, tracking Wall Street's decline. Notably, Coca-Cola HBC led advancers with a whopping 9.2% gain after reporting first half earnings growth with sales supported by warmer weather, followed by Worldpay Group that added 4.89%. Most members were down however, with InterContinental Hotels Group being the worst performer, down 3.07%. The Footsie's daily chart presents a strong bearish stance, as the benchmark broke below its 20 and 100 DMAs, while technical indicators entered negative territory with strong bearish slopes. In the shorter term, and according to the 4 hours chart, the bearish potential is also strong, as the index is far below all of its moving averages, whilst technical indicators retain their bearish slopes, despite being in oversold territory.

Support levels: 7,340 7,302 7261

Resistance levels: 7,383 7,410 7,445


European equities remained depressed amid risk aversion, with the German DAX ending the day at 12,014.30, down 138 points or 1.15%, its lowest settlement since mid April. European indexes followed the lead of their Asian counterparts, and within the DAX, only two members managed to close in the green, ProSiebenSat.1 Media that added 0.38% and ThyssenKrupp that ended up 0.34%. The worst performer was Henkel, down 4.215, followed by Deutsche Bank that shed 3.78%. The index fell further in after-hours trading, heading into the Asian opening well below the 12,000 threshold. The bearish Momentum is strong according to technical readings in the daily chart, as indicators head lower within bearish territory, whilst the index approaches its 200 DMA at 11,906, now a probable bearish target for this Friday. In the 4 hours chart, the index is bar below now bearish moving averages, whilst technical indicators heading lower within oversold levels, in line with further slides ahead.

Support levels: 11,955 11,906 11,867

Resistance levels: 12,012 12,054 12,098

HY Markets


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