Technical Analysis for Gold, US & UK Oil, DAX, S&P 500, and More
Precious metals are working towards a resolution, but patience is required for now. Oil markets look vulnerable here as the market is leaning heavily long. Equity indices are presenting some interesting short-term set-ups which could evolve soon.
- Gold/silver remain congested, but could resolve themselves in the fairly near future
- WTI and Brent crude oil are both vulnerable as sentiment has become extreme
- Several global indices are presenting set-ups of interest which could come into play very soon
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Precious metals remain a ‘chop-fest’ seeking resolution. Gold has resistance right around 1300 and is vulnerable to a pullback towards a trend-line off the December low around the area of 1275/80. Silver continues to grind on a trend-line running higher since July, and could be in danger of breaking soon. It’s doing so within the confines of a triangle, which could lead to a sharp break if support gives way. But a break is needed first before gearing up a bearish bias. If it holds and breaks the top of the pattern then a rally could commence. But the thinking on this end is that risk is growing towards lower prices.
US crude oil has been rallying strongly, but is vulnerable to a pullback as large speculators are extremely long (new record long last week) around the underside of the 1998 trend-line. This would put the recent ‘neckline’ breakout on pause. A drop below 57 could set into motion a decline towards 55 in the near-term. UK crude oil has been weaker than its US counterpart in recent trade by failing to make a higher-high with it. A decline would bring the lower parallel off the late-August swing-low and recent low into play in the mid to lower-61s.
US Crude Oil/Large Spec Positioning:Weekly
The DAX has been volatile lately, but making no headway in either direction. This could soon change. Price action is coiling up and looking poised to make a move very soon. On the hourly chart we can see a possible continuation-style ‘head-and-shoulders’ which is morphing into a triangle. A breakout is growing closer, with risk increasing that it comes to the downside in-line with the sell-off from recent record highs. If this is the case, we’ll look for a move to the 12676/500 region. A strong push higher has the index back in rally-mode.
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The CAC is working its way higher in an upward channel (‘bear-flag’), which if triggered lower suggests another leg down will be in the works. The FTSE is also in a precarious position and if it can’t sustain higher trade soon is at risk of breaking lower towards a support zone in the area of 7315/290.
The S&P 500 is very near the apex of a rising wedge on the hourly. It has bearish implications upon a break, but expectations are tempered for seeing a big sell-off with support not far below around 2580. End-of-year seasonality is also seen a supportive and unlikely to see the market fall apart.
S&P 500: Hourly
In Asia, the Nikkei is putting in a triangle of its own, and should resolve itself soon. As could be the case with European indices, a continuation trade lower could be in the works. But we’ll wait for the developing triangle to break first before drawing further conclusions.
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---Written by Paul Robinson, Market Analyst
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