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Analysis | Commodity Technical Analysis | Written by HY Markets | Mon Sep 04 17 04:37 ET

GOLD

Gold prices posted strong gains this past week, with spot closing at $1,325.91 a troy ounce, its highest settlement since September last year. There were multiple factors behind gold's advance, being turmoil around the US government, a persistent weak dollar, and escalating geopolitical tension in Asia among the most relevant, as all contribute to the case of a slower pace of tightening coming from the US Federal Reserve. Gold traded as high as 1,328.82 before retreating modestly, anyway poised to extend its advance, as weekend developments in North Korea will likely fueled demand for the safe-haven metal. Technically, the daily chart shows that the price remains far above a bullish 20 DMA that continues advancing above the larger ones, whilst technical indicators have partially lost upward strength within overbought territory, far however, from suggesting a slide. In the 4 hours chart, technical indicators keep heading north, with the RSI indicator nearing overbought readings, as the price remains above bullish moving averages, all of which supports additional gains on a break above the mentioned yearly high.

Support levels: 1,323.65 1,313.40 1,304.95

Resistance levels: 1,328.85 1,337.35 1,344.10

WTI CRUDE OIL

West Texas Intermediate crude oil futures edged sharply higher on Friday, ending the day around $47.30 a barrel, down anyway for a fifth consecutive week. News that the US stockpiles declined by more than expected, according to the EIA, only supported the commodity partially, as the Hurricane Harvey has affected US's refining capacity, and will probably result in less demand for crude in the next few weeks. The EIA data belong to the week ending August 25th, right before the Hurricane hit the US Coast Gulf. News on Friday indicated that the number of active US rigs drilling for oil remained unchanged at 759 last week, according to Baker Hughes that anyway reported that could not verify South Texas rigs amid the impact of Harvey. Daily basis, WTI ended a few cents above a horizontal 100 DMA, while technical indicators aim modestly higher within neutral territory, which is not enough to confirm additional gains ahead. Shorter term, and according to the 4 hours chart, the price remained below its 100 and 200 SMAs, with the shortest heading south below the largest and acting as immediate resistance at 47.50, while technical indicators aim north well above their mid-lines, supporting additional gains on a break above the mentioned resistance.

Support levels: 46.60 45.90 45.40

Resistance levels: 47.50 48.15 48.85

DJIA

Wall Street closed with gains on Friday, with the DJIA adding 39 points, to end at 21,987.56, while the S&P added 5 points, to close at 2,476.55. The Nasdaq composite settled at an all-time high of 6,435.33 after adding 6 points or 0.10%. US jobs data, which showed that sluggish wage growth persisted in August, backed the rally in local equities as the report could result in US Federal Reserve slowing its tightening pace. Within the Dow, General Electric was the best performer, adding 2.40%, followed by Chevron which added 1.06%. United Technologies was the worst performer, ending the day 1.50% lower, while Microsoft followed, ending down 1.11%. The daily chart for the DJIA shows that the index settled well above a still marginally bearish 20 DMA, while technical indicators turned flat, the Momentum around its mid-line and the RSI now at 58, as the index retreated from its daily high, unable to hold above the 22,000 threshold. In the 4 hours chart, the Momentum indicator keeps retreating within positive territory, the RSI consolidates around 64, while the index remains above all of its moving averages, keeping the downside limited as long as the index holds above the 21,960 region, where buying interest defended the downside for most of the last two-days.

Support levels: 21,960 21,910 21,863

Resistance levels: 22,038 22,086 22,137

FTSE100

The FTSE 100 advanced 0.11% or 7 points on Friday to close at 7,438.50, backed by a rally in mining-related equities. Weaker-than-expected US data also help the benchmark to remain afloat, as Pound gains were well-limited, in spite of dollar's weakness. Within the Footsie, Ashtead Group was the best performer, adding 2.53%, followed closely by Antofagasta and Glencore, both adding over 2.0%. Micro Focus International was the worst performer, down 7.74%, after the company reported that it merge with HPE could trigger penalties under 2016 US tax inversion regulations. The daily chart for the index shows that it settled above its 20 and 100 DMAs, both converging flat around 7,400, but also that technical indicators head higher within positive territory, favoring an upward extension for this Monday. In the shorter term, and according to the 4 hours chart, the index settled well above all of its moving averages, also converging within a tight range in the 7,400 region, while technical indicators eased modestly from overbought levels, rather reflecting the latest consolidation than suggesting an upcoming downward move.

Support levels: 7,400 7,348 7,313

Resistance levels: 7,444 7,480 7,523

DAX

Major European indexes closed higher on Friday, with the German DAX adding 87 points to end at 12,142.64, up for third consecutive day. A weaker EUR, on news suggesting the ECB will delay discussing tapering until next December underpinned local equities. Automotive and mining stocks led the way higher in the region, and within the DAX, Deutsche Lufthansa was the best performer, up 3.23%, followed by Infineon Technologies that added 2.14%. ProSiebenSat.1 Media led decliners, closing the day 1.65% lower, followed by Linde that shed 0.65%. From a technical point of view, the daily chart shows that it settled a few points above a bearish 20 DMA, but also that technical indicators were unable to settle above their mid-lines, limiting the upward potential. In the 4 hours chart, the index advanced above a bearish 20 SMA and closed around a horizontal 100 SMA, while technical indicators turned modestly lower, holding anyway near overbought levels. The weekly high for the index was set at 12,191 with gains beyond it required to favor a new leg higher for this Monday.

Support levels: 12,132 12,093 12,045

Resistance levels: 12,191 12,241 12,286

HY Markets
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