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Analysis | Commodity Technical Analysis | Written by HY Markets | Mon Aug 14 17 04:34 ET

GOLD

Spot gold settled at its highest in two months, ending Friday at $1,291.18 a troy ounce, boosted by the ongoing risk sentiment triggered by tensions between the US and North Korea. Base metals, particularly those considered safe-havens, benefited the most, as usual on times of fear, also helped by plummeting equities, and soft US inflation figures. By the end of the week, the US released its July PPI and CPI data, all of which came below expected, putting into question Fed's ability to maintain its tightening pace. The rally may continue this week, as the macroeconomic background has little chances of changing. The daily chart shows that the price soared above all of its moving averages, with the 20 SMA accelerating north above its 100 SMA, the Momentum indicator easing within positive territory, and the RSI maintaining its bullish slope around 73. In the 4 hours chart, the Momentum indicator diverges lower, retreating from extreme overbought levels, but the price posts higher highs above all of its moving averages, whilst the RSI indicator remains firm above 70, suggesting that the commodity may extend its advance further, particularly on a break above 1,295.56, this year high.

Support levels: 1,283.60 1,274.10 1,266.20

Resistance levels: 1,295.60 1,303.10 1,311.80

WTI CRUDE OIL

West Texas Intermediate crude oil prices fell down to 47.97 on Friday, recovering afterwards to end the day at $48.78 a barrel, anyway down for the week roughly 1.5%. News that the OPEC has increased its output during July, despite the late 2016 pact to reduce it, weighed on the commodity this past week, but signs that US production has stabilized let off some steam over the oil market. According to data released on Friday, the number of US active rigs drilling for oil climbed by three to 768 this past week, after rising by just one on the previous one. From a technical point of view, the daily chat shows that WTI established a few cents above its 20 DMA, but also that technical indicators have settled around their mid-lines, lacking directional strength. In the 4 hours chart, the price is below a bearish 20 SMA, while technical indicators stand pat within negative territory, limiting chances of a sharp recovery for the upcoming sessions.

Support levels: 48.50 47.90 47.20

Resistance levels: 49.65 50.20 50.70

DJIA

Wall Street managed to end Friday with modest gains, with the Dow Jones Industrial Average up 14 points, to end at 21,858.32, and the S&P adding 3 points, to 2,441.32. The Nasdaq Composite was the best performer, adding 39 points or 0.64%, to end at 6,256.56, as tech equities led the way higher. After falling on risk aversion for three consecutive days, US indexes recovered modestly during the last trading day of the week, as soft US inflation figures dented the case for another rate hike this year. Microsoft was the best performer within the Dow, up 1.53%, followed by Cisco Systems that added 1.52%. Travelers was the worst performer, down 1.16%, followed by Exxon Mobil that shed 0.96%. Down 1.1% on the week, the DJIA daily chart shows that the index settled around its 20 DMA, pressuring the indicator for a second consecutive day, while technical indicators retreated further from extreme overbought levels, but hold within positive territory. In the 4 hours chart, the index hovers around its 100 SMA, well below a strongly bearish 20 SMA and with technical indicators having bounced from oversold levels, but stabilizing within negative territory, maintaining the risk towards the downside.

Support levels: 21,843 21,808 21,760

Resistance levels: 21,909 21,941 21,992

FTSE100

The FTSE 100 posted its lowest settlement in three months on Friday, down on the day 1.08% or 79 points, to 7,309.96. Mining-related equities led the way lower by the end of the week, hit by news coming from China, as the local Iron and Steel Association warned that rising prices were “not driven by market demand or reduced market supply” but speculative, adding that it may not be sustainable in time. Among advancers, Smurfit Kappa was the best performer, up by 1.74%, followed by Persimmon which added 1.58%. Standard Life on the other hand was the worst performer, down 3.75%, followed by Rio Tinto that shed 3.15%. The Footsie had its worst week in nearly four months, and the daily chart suggests that the slide may continue this week, as technical indicators continue heading south within negative territory, while the index settled far below its 20 and 100 DMAs. In the 4 hours chart the bearish momentum remains strong, as technical indicators maintain their downward potential within oversold territory, whilst the 20 SMA turned sharply lower far above the current level.

Support levels: 7,284 7,253 7,226

Resistance levels: 7,318 7,345 7,377

DAX

The German DAX managed to close unchanged on Friday at 12,014.06, although most European indexes closed lower, undermined by falling banks equities. The index closed the week deeply on the red as risk sentiment sent investors away from high yielding assets ever since the week started. Most members were up on Friday with Fresenius leading the way higher, up 1.83%, followed by Merck that added 1.79%. Commerzbank led decliners, down 0.94%, followed by Vonovia that lost 0.72%. The pair fell down to 11,933 by the end of the week, level last seen in March, and just a few points above a still bullish 200 DMA. In the same chart, however, the 20 DMA maintains a sharp bearish slope above the current level, while technical indicators hold within negative territory, in line with further slides ahead. In the 4 hours chart, the bearish tone is even stronger, with the 20 SMA accelerating south well above the current level, and technical indicators consolidating near oversold territory, with no signs of a possible recovery ahead.

Support levels: 11,985 11,933 11,874

Resistance levels: 12,048 12,097 12,146

HY Markets
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