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Analysis | Commodity Technical Analysis | Written by HY Markets | Wed Sep 27 17 05:00 ET


Spot gold turned back south, ending the day around $1,299.30 a troy ounce amid a resurgent dollar. Risk aversion at the beginning of the day lifted the metal up to 1.313.57, but dollar's broad demand afterwards put it under pressure after the US opening, particularly as the market is showing less sensitivity to US-North Korea headlines. The commodity came under further pressure after Fed's Yellen comments on inflation and monetary policy, reaffirming policymakers' will to keep on moving forward, despite "transitory" inflation setback. The daily chart for the metal shows that its currently hovering around the 38.2% retracement of its July/September rally, and also that the risk is towards the downside, as the 20 SMA keeps gaining downward strength above the current level, whilst technical indicators are turning back south within bearish territory. In the 4 hours chart, the price is pressuring a marginally bullish 20 SMA, whilst technical indicators turned sharply lower from near overbought levels, now aiming to enter bearish territory, also favoring a downward move ahead.

Support levels: 1,288.10 1,280.45 1,272.20

Resistance levels: 1,303.95 1,311.60 1,321.45


Crude oil prices surged at the beginning of the day to fresh multi-month highs, but ended it marginally lower, as investors took profits out of the table ahead of US inventories reports. West Texas Intermediate crude futures traded as high as $52.41 a barrel to settle around 51.90, overall maintaining the positive stance seen over the last few days. Maintaining the commodity afloat, were news that rising demand in emerging economies will help the market to rebalance. Daily basis, the positive tone persists, as technical indicators have barely pared their advance, holding within overbought territory anyway, whilst the price is firmly above all of its moving averages, and as the shortest accelerates above the larger ones. In the shorter term, and according to the 4 hours chart, technical indicators have entered a consolidative phase near overbought levels, whilst the 20 SMA extended its advance, now acting as dynamic support around 51.20. Positive news coming from the US will likely result in the price retesting 53.74, last April high.

Support levels: 51.20 50.50 49.80

Resistance levels: 52.45 53.10 53.70


US indexes closed mixed, with the Dow Jones Industrial Average down 11 points, to 22,284.32, down for a fourth consecutive day, but the Nasdaq Composite and the S&P posting modest advances, up by 0.15% and 0.01% respectively. US equities hovered within gains and losses all through the day, as Fed's Chairwoman Yellen failed to motivate investors. Within the Dow, Apple led advancers, up 1.72%, followed by Nike, which added 0.88%. McDonald's was the worst performer, down 1.86%, followed by DowDuPont that lost 1.41%. The daily chart for the index shows that technical indicators retreated further from overbought levels, now clearly supporting a downward corrective movement, although the price remains far above all of its moving averages, with the 20 DMA heading north around 22,140, a key support, should the decline continue. Shorter term, and according to the 4 hours chart, the Dow also gains downward momentum, capped by a bearish 20 SMA, now at 22,320, and with technical indicators gaining downward strength within negative territory.

Support levels: 22,258 22,216 22,140

Resistance levels: 22,320 22,370 22,424


The FTSE 100 ended the day marginally lower, down 15 points, at 7,285.74, undermined by comments from EU Tusk, who said that there had been "no sufficient progress" within Brexit negotiations. Despite PM May's encouraging speech from late last week, European negotiators are unwilling to move forward until the divorce Bill and citizens' rights are settled, undermining confidence in the Pound, and UK assets. NMC was the best performer, adding 2.76%, followed by Carnival which gained 2.68% after raising its full-year forecast for earnings, while also rising its forecast for net revenue yields. Shire led declines, down 2.36%, followed by WPP which closed 1.69% lower. The index remains within Friday's range, still biased lower according to technical readings, as indicators are turning south within negative territory, whilst the 20 DMA extended further lower above the current level. In the 4 hours chart, however, the index turned neutral, now stuck around its 20 SMA and with technical indicators heading nowhere around their mid-lines.

Support levels : 7,236 7,195 7,152

Resistance levels: 7,312 7,344 7,381


Equities saw little change in Europe this Tuesday, as early slides, triggered by risk aversion, were reversed ahead of the close. A weaker EUR should have pushed equities higher, but falling oil prices and geopolitical jitters offset any positive momentum within European stocks. The German DAX managed to add 10 points, or 0.08%, to end the day at 12,605.20, with most members ending the day up, led by Linde, which added 2.54%, and Volkswagen that gained 2.33%. Adidas was the worst performer, down 2.01% on the day. The daily chart for the index shows that it remains stuck within a limited range, but near September highs, maintaining the upside favored. In the same chart, technical indicators hold near overbought readings, with the Momentum modestly lower and the RSI marginally higher, giving no clear clues on what's next. In the shorter term, and according to the 4 hours chart, the index turned neutral, now standing a few points above its 20 SMA, and with technical indicators heading nowhere within neutral territory.

Support levels: 12,537 12,489 12,439

Resistance levels: 12,584 12,630 12,677

HY Markets


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