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Analysis | Commodity Technical Analysis | Written by HY Markets | Mon Aug 21 17 03:13 ET

GOLD

Gold prices changed course on Friday, with spot ending the week marginally lower at $1,286.38 a troy ounce after reaching a fresh 2017 high of 1,300.72. The commodity got market's favor during the second half of the past week, amid a dovish tone coming from US policy makers in the form of the FOMC Minutes, and the terror attack that took place in Spain. On Friday, however, equities pared their sell-off, whilst the inability of the commodity to rally pass the psychological threshold of 1,3000 fueled profit taking at the end of the day. From a technical point of view, the daily chart shows that the price remains well above all of its moving averages, with the 20 DMA maintaining a sharp bullish slope far below the current level, while technical indicators remain within positive territory, but losing upward strength and posting lower highs, drawing a bearish divergence that is yet to be confirmed. In the 4 hours chart, the technical picture is quite alike with the price holding above all of its moving averages, whilst technical indicators retreat from overbought levels, with strong bearish slopes, but still above their mid-lines.

Support levels: 1,281.65 1,273.95 1,261.20

Resistance levels: 1,292.10 1,300.90 1,309.25

WTI CRUDE OIL

Crude oil prices posted a nice comeback on Friday, with WTI ending the week at $48.71 a barrel, trimming all of its weekly losses amid a string of positive news for the oil market. Following the EIA weekly report that showed a sharp draw-down in US stockpiles, news on Friday revealed that the number of active oil rigs drilling for oil fell by five last week, bringing the total count down to 763, according to Baker Hughes. A broadly weak dollar, also helped WTI that bottomed for the week at 46.45. From a technical point of view, the daily chart shows that the US benchmark settled above its 100 DMA, but below the 20 and 200 DMAs, with the largest having capped July's advance. Technical indicators in the mentioned chart have recovered ground, but the Momentum remains below its 100 level while the RSI aims north around 54, not enough to confirm additional gains ahead at this point. In the 4 hours chart, the commodity closed right below its 100 SMA, the immediate resistance at 48.90, while technical indicators stabilized well above their mid-lines, losing upward strength at the end of the week amid diminishing volumes.

Support levels: 48.15 47.55 46.85

Resistance levels: 48.90 49.60 50.20

DJIA

Wall Street closed in the red on Friday, with the Dow and the S&P down for a second consecutive week and the Nasdaq Composite logging its fourth consecutive weekly decline. The Dow Jones Industrial Average lost 76 points, to end at 21.674.51, while the S&P shed 4 points, and ended at 2,425.55. The Nasdaq Composite lost 0.09%, to 6,216.53. Risk aversion led the way lower, amid the terror attack in Spain, alongside with woes in the White House, after several Trump's advisors left the administration this last week. Investors, however, hesitated on how to price-in the latest US political headline, indicating that Trump’s strategist Stephen Bannon departed the White House. Bannon a well-known nationalist, could have been dismissed in an effort to tame warring factions, but it's still another advisor quitting, signaling that internal woes keep interfering with the political agenda. Most members were down within the Dow, with Nike being the worst performer, down 4.37% followed by Cisco System that lost 2.16% Caterpillar was the best performer, adding 0.69%, followed by Chevron and Exxon Mobile, which added around 0.50% each on oil's recovery. Dow's decline is poised to extend according to technical readings in the daily chart, as indicators keep heading south at multi-month lows, whilst the index extended further below its 20 DMA. In the 4 hours chart, technical indicators stabilized within oversold territory, whilst the index stands below all of its moving averages, 200 SMA contained advances by the end of the week, currently acting as dynamic resistance at 21,757.

Support levels: 21,642 21,603 21,566

Resistance levels: 21,710 21,757 21,790

FTSE100

The FTSE 100 fell 63 points or 0.86% on Friday to end the week at 7,323.98, undermined by declines in airlines and travel companies-related equities, following the terror attack in Barcelona from late Thursday. A persistently weak Pound, also hit the Footsie, with only eight members managing to close the day with gains. Randgold Resources was the best performer, up 1.22%, amid a rally in gold prices. Paddy Power Betfair, on the other hand, was the worst performer, ending the day 3.95% lower, followed by Babcock International Group that lost 2.98%. The daily chart shows that the index settled not far above a weekly low of 7,293, also that it failed mid-week to advance beyond a bearish 20 DMA, whilst technical indicators head south within negative territory, all of which maintains the risk towards the downside for the upcoming days. In the shorter term, and according to the 4 hours chart, technical readings also favor a bearish continuation, as the index stands far below all of its moving averages, whilst technical indicators stand well below their mid-lines, although with limited directional strength.

Support levels: 7,293 7,257 7,218

Resistance levels: 7,337 7,369 7,401

DAX

European equities ended in the red, dragged lower by travel-related stocks that plunged after the Barcelona attack, with investors confidence also dented by TrumpĀ“s administration woes. The German DAX lost 38 points to end at 12,165.19, with Merck leading decliners, down 1.54%, followed by Fresenius that shed 1.25%. Muenchener was the best performer, adding 1.55%, followed by Commerzbank that gained 1.24%. The daily chart for the benchmark shows that it settled right below a bearish 20 SMA, but also that technical indicators have lost their bearish strength, aiming higher around their mid-lines. Shorter term, however, the risk remains towards the downside, as in the 4 hours chart, the index remains below all of its moving averages, with the 100 and 200 SMAs gaining bearish momentum, whilst technical indicators head nowhere right below their mid-lines. The index bottomed at 12,081 early Friday, with a break below it exposing the 12,000 threshold for early next week.

Support levels: 12,127 12,081 12,034

Resistance levels: 12,126 12,263 12,310

HY Markets
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