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Analysis | Commodity Technical Analysis | Written by HY Markets | Tue Sep 12 17 04:31 ET

GOLD

Gold prices came under strong selling pressure this Monday as risk aversion eased, with the commodity trading at its lowest in almost a week by the end of the day, around $1,326.60 a troy ounce. A stronger dollar amid easing geopolitical tensions and a strong bounce in equities pushed the commodity lower, also dumped for the sake of riskier, and more profitable assets. Curiously spot gapped lower at the weekly opening, and seems poised to fill another gap, left at the beginning of the previous week, when a North Korean nuclear test pushed the commodity higher, at 1,325.90. The daily chart for gold shows that technical indicators have begun correcting extreme overbought conditions, whilst the price remains far above all of its moving averages, in line with further downward corrections ahead. The 20 DMA particularly, stands now at 1,315.30, providing a dynamic support in the case of further dollar gains. In the 4 hours chart, the commodity is biased lower, trading below a bearish 20 SMA and with technical indicators heading sharply lower within negative territory, also leaning the scale towards the downside for the upcoming sessions.

Support levels: 1,325.90 1,315.30 1,306.60

Resistance levels: 1,337.80 1,346.30 1,355.10

WTI CRUDE OIL

West Texas Intermediate crude futures reversed an early slide and closed the day with gains at $48.10 a barrel. Oil prices were quite volatile, as investor assessed the impact of Hurricane Irma in the US Florida. The initial decline came as a consequence of fears of diminishing demand for the black gold, but as the day went by, risk of a downturn in crude demand lessened, resulting in the late recovery. Further supporting the commodity were comments from Saudi Arabia officers, which talked about a three-month extension of the ongoing output cut deal. The daily chart presents a neutral stance, as the price remains trapped between horizontal 100 and 200 DMAs, although a brief dip below the shortest was quickly reverted, somehow indicating limited selling interest at this point. Technical indicators in the mentioned chart hold flat around their mid-lines, giving no clues on what's next for oil. In the 4 hours chart, the price is also trapped between horizontal moving averages, with selling interest containing advances around the 200 SMA, and while technical indicators resume their declines after correcting oversold conditions, leaning the scale towards the downside.

Support levels: 47.90 47.20 46.60

Resistance levels: 48.70 49.40 50.00

DJIA

Wall Street ended the day with strong gains, as risk appetite returned after a quieter-than-expected weekend. The DJIA regained the 22,000 level, to end the day 259 higher at 22,057.37, while the Nasdaq Composite added 72 points, to 6,432.26. The S&P surged to a fresh 2017 record high after advancing 1.08%, ending the day at 2,488.11. Insurers companies followed the lead of their European counterparts, posting strong gains on Hurricane Irma consequences' relief. DowDuPont was the best performer, gaining 2.88%, followed by Travelers that advanced 2.21%. Only three members closed down, with Home Depot losing 0.91% and General Electric shedding 0.71%. The index is at its highest in 4-weeks, and technical readings in the daily chart support additional gains ahead, as the index gained upward momentum after breaking above its 20 DMA, whilst technical indicators aim north well above their mid-lines. Shorter term, and according to the 4 hours chart, the index is far above all of its moving averages, whilst technical indicators maintain their upward strength, despite being in overbought territory, also favoring a new leg higher for this Tuesday.

Support levels: 22,005 21,970 21,928

Resistance levels: 22,086 22,137 22,179

FTSE100

London equities ended mostly higher this Monday, with the FTSE 100 settling at 7,413.59, up by 0.49% or 36 points. Risk appetite was behind the advance after Hurricane Irma was downgraded to a tropical storm, with insurers companies surging by the most on speculation of lesser damages from the Hurricane than previously estimated. Within the Footsie, Provident Financial was the best performer, adding 3.77%, followed by EasyJet that added 3.37%. Mining-related equities edged lower, as gold fell to its lowest in over a week, resulting in Randgold Resources losing 1.54%. The worst performer was Associated British Foods that lost 4.96%. The index remains within its latest range, with a slightly positive tone in the daily chart, as technical indicators aim modestly higher above their mid-lines, whilst the index settled above its anyway directionless moving averages. In the 4 hours chart, the early gap sent the index above a congestion of moving averages, a sign of lack of directional strength, whilst technical indicators lost their upward potential, but hold within positive territory anyway.

Support levels: 7,400 7,376 7,333

Resistance levels: 7,444 7,482 7,515

DAX

European equities edged higher, advancing by the most in almost a month, on improved market's mood. The German DAX closed at 12,475.24, up 173 points, on easing concerns over Hurricane Irma economic consequences, and a quiet North Korea celebration over the weekend, with no missiles involved. Financials were the best performers in Europe, and within the DAX, Muenchener led advancers, ending the day up 4.36%, followed by Commerzbank and Deutsche Bank, up 3.36% and 2.86% respectively. Daimler was the only one to close in the red, down by 0.07%. The daily chart for the benchmark shows that it settled above its 100 DMA for the first time since July 24th, while technical indicators keep heading higher within positive territory with uneven strength, but still favoring additional advances for this Tuesday. In the 4 hours chart, the index settled far above all of its moving averages, with the 20 SMA accelerating above the 100 and 200 SMAs, but technical indicators easing from extreme overbought readings, anticipating at least some consolidation ahead and before the next directional move.

Support levels: 12,462 12,424 12,372

Resistance levels: 12,532 12,576 12,612

HY Markets
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