Gold is making a move again on the 2013 trend-line, and on that is at risk of a pullback near-term; break above on a weekly basis needed to clear a path higher. Silver at a vulnerable spot. Crude oil at risk of a short-term pullback off prior peak. The S&P 500 may continue rebound from big support.
Technical Highlights:
- Gold and silver face challenges at resistance, looking for short-term weakness
- Crude oil is trading around a prior peak, risk of near-term pullback
- S&P 500 rebound from major support could continue (broader top could come into view)
Check out the DailyFX Top Trading Opportunities for 2018 on the DailyFX Trading Guides page.
Gold and silver face challenges at resistance, looking for short-term weakness
The strong rally in gold from support is at risk of a pullback now that the precious metal is again trading around the 2013 trend-line. There a short-term trend-line to contend with off the January high, as well, but the focus is primarily on the longer-term slope. A weekly close above the 2013 line as well as highs this year is needed to get momentum rolling.
So far, 2018 has brought a relatively tight range and at some point that will give-way. The feeling on this end is a resolution will come to the upside, but perhaps not until after a little more see-saw price action.
See how current positioning in various markets/FX pairs could signal their next moves on the IG Client Sentiment page.
Gold Daily Chart (Near-term pullback risk)
At this time, silver is the preferred short candidate of the two major precious metals given its relative weakness to gold and stiff resistance from around 16.80 up to 17. There are numerous inflection points in the area along with the 200-day MA running through the thick resistance.
Silver Daily Chart (At resistance)
Crude oil is trading around a prior peak, risk of near-term pullback
Yesterday, crude oil posted a bearish reversal day around the January high. This has the immediate outlook turned lower, but conviction for a strong decline to unfold is low. At this time a pullback before another turn higher is viewed the most probable outcome. Support comes in around 64.21.
Crude Oil Daily Chart (Reversal around January high)
S&P 500 rebound from major support could continue (broader top could come into view)
On Friday, the S&P 500 closed right at the February 2016 trend-line and 200-day MA; a major area of confluence. The strong gap-and-run higher yesterday has the near-term bias tilted upward. If we don’t see sellers immediately step in, look for a run towards the trend-line off the record high.
The thinking on this end, is that we are in the process of carving out a topping sequence marked by strong declines and increasingly weaker snapbacks. If we see price action continue to weaken on rebounds at some point a break of the Feb ’16 trend-line/200-day is likely to lead to a very strong decline. For now, we’ll respect strong support for as long as it lasts.
We also discussed the outlook for the DAX, CAC, and FTSE. Look for Europe to continue to be relatively weaker than the U.S. market.
S&P 500 Daily Chart (Bouncing from big support)
Resources for Index & Commodity Traders
Whether you are a new or an experienced trader, DailyFX has several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.
---Written by Paul Robinson, Market Analyst
To receive Paul’s analysis directly via email – SIGN UP HERE
You can follow Paul on Twitter at @PaulRobinsonFX
