Jump to content

Commodities Technical Round-up: Gold, Silver and WTI Drop


MongiIG

Recommended Posts

COMMODITY TECHS : GOLD (XAU/USD) , WTI CRUDE OIL AND SILVER (XAG/USD)

  • Gold drops with the yearly low (1676) in its sights
  • Silver breaks below key support to trade at fresh yearly lows
  • WTI crude oil marks its second successive day of declines after facing rejection at the 50 SMA

Gold and Silver Technical Forecast: Charts Indicate Further Losses Ahead  for XAU, XAG

 

GOLD DROPS, HEADING TOWARDS THE YEARLY LOW

Gold continues the longer-term downtrend with the latest drop below the August and September 2021 lows (1722). Over the medium-term however, price action has exhibited a tendency to move higher after printing the low in July which ultimately failed to break above the psychological 1800 level. With the 1800 level proving a tough nut to crack, a bearish engulfing set the tone for a continuation of the longer-term trend. last week's bullish pullback was halted at the 50-periodsimple moving average (SMA), resulting in four days of successive down days.

There is little in terms of near-term resistance until a retest of the yearly low at 1676.70 - a level that sits just above the full Fibonacci retracement of the 2020-2021 major move. However should we see any short-term fatigue in the current bearish move the 1722 level appears as resistance followed my 1755 add 1774.

The MACD indicator suggests that momentum is on this side of the bearish move while the RSI reveals that we do not yet trade at oversold levels.

Gold (XAU/USD) Daily Chart

Commodities Technical Round-up: Gold, Silver and WTI Drop

Source: TradingView, prepared by Richard Snow

SILVER BREAKS BELOW KEY SUPPORT TO PRINT NEW YEARLY LOW

Like gold, silver also shows a continuation of the longer-term downtrend after failing to retest the zone of resistance around 21.40 - 22.10. This presented the first signal that the bullish pullback had run out of momentum, opening up a retest of the zone of support which includes the 61.8% Fib retracement (18.69) of the 2020-2021 major move; and the 2019-2020level of resistance (18.65).

The RSI indicator reveals that current price action is moments away from being considered oversold’, which could see a near term pullback towards the zone of resistance, prior support. Play next level of support is the 16.95 level followed by the multi-year major support at 15.65.

Silver (XAG/USD) Daily Chart

Commodities Technical Round-up: Gold, Silver and WTI Drop

Source: TradingView, prepared by Richard Snow

The weekly chart helps to add context to the key levels mentioned above, highlighting prior pivot points or levels that price action had previously respected.

Silver (XAG/USD) Weekly Chart

Commodities Technical Round-up: Gold, Silver and WTI Drop

Source: TradingView, prepared by Richard Snow

WTI EXPERIENCING TWO-DAY SELL-OFF

WTI crude oil continues to show a lack of discernible direction as it continues to oscillate broadly between 85 and 95. Yesterday, price action completed a bearish engulfing which appeared right below the 50 SMA, sending prices lower in the London session thus far.

Oil now tests the 61.8 Fib retracement at 88.40 with further downside challenges at 85.75, followed by the 78.6% fib retracement at 78.60. In a previous report I looked at how the RSI indicator capped upside potential via its midpoint line is it had shown to be a reasonable indicator of upside exhaustion during the longer-term downtrend – which failed to hold this time.

Resistance appears at 93 followed by 96.44 and the 100 dollar psychological level.

WTI (CL1!) Daily Chart

Commodities Technical Round-up: Gold, Silver and WTI Drop

Source: TradingView, prepared by Richard Snow

 

Aug 31, 2022 | DailyFX
Richard Snow, Analyst

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      21,205
    • Total Posts
      90,753
    • Total Members
      41,316
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    Delboy
    Joined 31/01/23 12:42
  • Posts

    • The ECB is expected to raise rates again at its meeting this week, but will it be enough to bolster the euro? Source: Bloomberg   Forex Indices European Central Bank Euro EUR/USD United States dollar  Chris Beauchamp | Chief Market Analyst, London | Publication date: Tuesday 31 January 2023  What will the ECB do? The European Central Bank (ECB) is expected to raise rates by 50bps at its meeting. What is the background? Like most major central banks, the ECB has been pushed into raising rates in order to combat high levels of inflation. While energy prices have come down, price increases remain above the ECB’s 2% target, and as a result, the bank still views it as necessary to push ahead. No ECB member has dissented from this view of late, leaving markets with little indication that a dovish caucus is forming. Indeed, inflation remains high, but economic data remains resilient. Expectations for a recession, which were widespread as 2022 ended and 2023 began, have been pushed further out, towards the second half of this year and even into 2024, helped by a slump in energy costs that has allayed the worst fears of economists and investors. What is the market impact? If the ECB can send a suitably hawkish message along with the expected 50bps rate hike, then the euro may receive some support against the US dollar. However, euro bulls must be aware that the pair has come a long way since the October lows, and while it only puts a modest dent in the 2022 downtrend, it does mean that the bar for further EUR/USD gains is rather high. This is coupled with negative divergence on the daily MACD indicator, which suggests weakening bullish momentum in the short-term and a general unwillingness to push the rally much further in the near-term. If the ECB is not viewed as being sufficiently hawkish, then EUR/USD may continue to weaken from its eight-month highs, but a move below $1.05 would be the minimum needed to indicate that the sellers have reasserted control. Source: ProRealTime Meanwhile in indices, a weaker euro could give the Dax some fresh impetus, but this would need to be fairly strong to counter worries about a weakening eurozone economy that might ensue. And if the ECB is much more hawkish and provides EUR/USD with a reason to recover then the risk to eurozone stocks is skewed to the downside. Some might argue that, given the huge rally in the Dax this month, some weakness is needed to take the froth out of the index, which may well be pricing in too optimistic a scenario. A drop back towards the 50-day SMA might bring the June and November 2022 highs into view as potential support. This would still leave the uptrend intact. Bulls would welcome further gains in order to cancel out the MACD’s negative divergence that looms large at present. Further upside targets 15,605 and then 15,725. Source: ProRealTime
    • Charting the Markets: 31 January FTSE, DAX and Nasdaq consolidate after latest leg higher. EUR/USD and GBP/USD fall back while USD/JPY rallies, ahead of central bank decisions. And Brent, gold and aluminium prices drop ahead of central bank meetings. Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Tuesday 31 January 2023           This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.
    • EUR/USD and GBP/USD fall back while USD/JPY rallies, as investors await central bank decisions The dollar has recovered to an extent this week, but the uptrends in EUR/USD and GBP/USD, along with the downtrend in USD/JPY, remain intact for now.  Chris Beauchamp | Chief Market Analyst, London | Publication date: Tuesday 31 January 2023  EUR/USD continues to drop back from recent high A modest pullback continues here with EUR/USD, eating into gains made since the beginning of the year. As markets brace themselves for a double hit of a Federal Reserve (Fed) and European Central Bank (ECB) meeting within a 24-hour period, EUR/USD has fallen back somewhat from the eight-month highs it reached last week. This is the first real weakness since the first week of January, and would leave the uptrend intact unless we see a move back below $1.04. If the price recovers above $1.05 then the bullish view is arguably intact and a bounce back towards $1.09 and higher may well develop. Source: ProRealTime GBP/USD stalls at December high Weakness here with GBP/USD has seen the price falter at a similar level to early December, with a possible negative divergence in the daily moving average convergence/divergence (MACD) sending a cautionary signal for bulls. Just as EUR/USD traders have to deal with the Fed and ECB decisions within the same 24-hour period, cable traders must cope with the Bank of England (BoE) decision following hard on the heels of the Fed’s. Much thus depends on that period for the next move in GBP/USD, though it will still arguably take much steeper losses to reverse the broadly bullish outlook. For that to happen we would need to see a drop below the 50-day simple moving average (SMA), followed up by a fall below the 200-day SMA. Having failed to establish a higher high, and with the MACD negative divergence a risk, the uptrend could come under pressure. A reversal above $1.24 would put the buyers back in charge. Source: ProRealTime USD/JPY edges up The greenback in USD/JPY has seen a modest recovery off its January lows, as the Bank of Japan (BoJ) dials down any hint of hawkish rhetoric. Nonetheless, the downtrend is still firmly placed. A move back above the 50-day SMA to suggest perhaps some further short-term strength, but the mid-December high around ¥134.00 would act as a barrier. Sellers will be looking for a fresh reversal that puts a move back to the January lows in play, and then sees a move below the May 2022 low around ¥126.50. Source: ProRealTime
×
×
  • Create New...