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Analysis | Commodity Technical Analysis | Written by HY Markets | Thu Sep 28 17 04:02 ET


Gold prices continued falling, with spot reaching a fresh September low of $1,282.49 a troy ounce, to settle at 1,283.71 by the end of the US session. The bright metal was hit strongly by a hawkish Fed, and the latest slide seems far from over, now that the commodity sits comfortably below the 1,300.00 threshold. From a technical perspective, the downward momentum persists in the daily chart, with technical indicators resuming their slides and particularly  the RSI that heads strongly south at 39 a fresh 2-month  low. The 100 DMA is now a probable bearish target, at 1,274.50. Shorter term, and according to the 4 hours chart, the metal is also biased lower, as the price settled well below all of its moving averages, with the 20 SMA gaining downward strength around 1,296.30, and technical indicators also heading sharply lower within bearish territory, and nearing oversold levels, with no signs of changing course.

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 were little changed for a second consecutive day, as despite the EIA report showed that US crude supplies fell by 1.84M in the week ended September 22nd, much better than the 2.29M build expected, gasoline stockpiles rose by more than expected. Gasoline stockpiles were up by 1.1 million barrels, after falling in the previous three weeks. The decline in crude stockpiles was due to refinery runs and exports being up last week, according to the official report. West Texas Intermediate crude oil futures ended at $52.06 a barrel, and the daily chart shows that the index remains well above its 100 and 200 SMAs, while technical indicators have lost upward strength, turning marginally lower, but still within overbought readings. Shorter term, and according to the 4 hours chart, technical indicators keep retreating within bullish territory, but the price remains far above its 100 and 200 SMAs. The commodity is having a hard time extending gains beyond the 52.00 level, as advances beyond it have been limited, and quickly reverted ever since mid 2015. The risk of a downward move, however, remains limited in the short term, amid hopes of a rebalancing oil market.

Support levels: 51.20 50.50 49.80

Resistance levels: 52.45 53.10 53.70


Hopes for a US tax reform pushed US indexes into the green this Wednesday, with the Dow Jones Industrial Average adding 56 points, to end at 22,340.71. The Nasdaq Composite added 1.15%, to 6,453.26, backed by a rally in tech stocks, while the S&P closed at 2,597.04, 10 points higher on the day. US President Trump presented the tax reform in Indiana by the end of the US session, but the speech was leaked ahead of the event, triggering little action at the end of the day. Nevertheless, the financial sector was the best performer on the news, and within the Dow, the best performer was United Technologies, which added 2.13%, followed by Goldman Sachs that closed 2.07% higher. JP Morgan Chase comes next, with a 1.63% gain. General Electric, on the other hand, led decliners, down by 2.23%. The Dow trimmed its previous days' losses, flat for the week and up for the day. Technically, the daily chart shows that the 20 DMA maintains a strong upward momentum below the current level, while the RSI indicator resumed its advance currently at 65. The Momentum indicator lags, heading south, but well above its mid-line overall maintaining the positive bias. Shorter term, and according to the 4 hours chart, the index presents a neutral-to-bullish stance, having settled a few points above a flat 20 SMA, and with technical indicators aim higher above their mid-lines.

Support levels: 22,318 22,258 22,216

Resistance levels: 22,370 22,424 22,460


The FTSE 100 gained 27 points on Wednesday, to end the day at 7,313.51, its highest settlement in two-weeks, helped by persistent Pound weakness, and a rally in financial-related equities. Also, news that publisher Pearson's recovery strategy got a positive note from Exane BNP Paribas, led it to the first place, as the share added 3.86%, followed by Royal Bank of Scotland that added 3.44%. Leading decliners, on the other hand, was Randgold Resources, down 2.34%, as gold prices extended their declines on broad dollar's strength. Footsie's recovery is still not enough to take the index out of a bearish market, as technical readings in the daily chart keep favoring the downside, given that the index remains below a bearish 20 DMA, whilst technical indicators keep consolidating within negative territory. In the 4 hours chart, the index remained above a marginally bullish 20 SMA, but below the larger ones, while technical indicators have turned lower within positive territory, overall neutral.

Support levels : 7,287 7,236 7,195

Resistance levels: 7,344 7,381 7,422


European equities closed in the green, helped by a recovery in financials, resulting in the German DAX ending the day at 12,657.41, up 52 points. Ahead of US Trump's speech, financial related equities advanced on hopes of fiscal stimulus in the US, in the form of tax cuts. Within the DAX, Deutsche Bank and Commerzbank where the best performers, up 3.47% and 2.38% respectively. Only eight members closed down, led by Vonovia that shed 1.08%. The index surpassed by a few points July's high of 12,677, further advancing in after-hours trading, following the lead of Wall Street. From a technical point of view, the daily chart indicates that the index could extend its advance, as technical indicators resumed their advances within positive territory, whilst the 20 DMA is about to surpass the 100 DMA. In the 4 hours chart, the index maintains a neutral-to-bullish bias, as the index holds firmly above an anyway horizontal 20 SMA, while the Momentum indicator aims barely higher above its mid-line, and the RSI indicator consolidates around 65.

Support levels: 12,686 12,642 12,596

Resistance levels: 12,704 12,732 12,774

HY Markets


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