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Chart Outlook – DAX, S&P 500, Gold Price, Crude Oil & More

Chart Outlook – DAX, S&P 500, Gold Price, Crude Oil & More

Paul Robinson, Strategist

Global equities are starting to have that 'look’ again, with the DAX rolling over rather hard and breaking important support and the S&P 500 looking ready to test a very important bull-market threshold soon. Gold remains poised for lower prices, while WTI crude oil is holding up well, but the Brent contract might be building a more bullish chart pattern.

Technical Highlights:

  • DAX decline picks up steam after break of support
  • S&P 500 headed for a collision with major support
  • Gold remains heavy, poised for lower levels
  • WTI stronger than Brent, but the latter building a bull-flag

For longer-term trading ideas, forecasts, and a library of educational content, check out the DailyFX Trading Guides.

DAX decline picks up steam after break of support

Last week, the DAX broke below support in the area of 12600/500, failed to recoup it on Friday’s retest, which then led to yesterday’s losses. More weakness is expected, with the February 2016 trend-line (~12100) up next as support, followed by a gap-fill at 11958.

We also discussed the broad head-and-shoulders top dating back to last June, which could come soon to implicate a much larger, sinister drop if the neckline is broken. It will need more time, so we'll discuss this further at a later time should it become relevant.

DAX Daily Chart

DAX daily chart

S&P 500 headed for a collision with major support

The S&P 500 broke down below the tops in May around the 2742-area, positioning itself for a very important test. In the area of the 2680/65 lies the February 2016 trend-line along with the 200-day MA, confluence which has kept the market afloat on three occasions since February.

The thinking on this end is that a fourth test won’t turn out so well. A failure to hold this bull-market ‘line-in-the-sand’ could spell big trouble as the summer progresses. But, as always, we must respect support until broken.

See the IG Client Sentiment page for how sentiment changes can help you better gauge market direction.

S&P 500 Daily Chart (Test of big support could happen soon)

S&P 500 daily chart

Gold remains heavy, poised for lower levels

Gold continues to trade lower in-line with expectations, with the 1240s/30s as the targeted zone of support for the current move. Down below lies the December 2015 trend-line and December low. There is a lower parallel ahead of the zone; however, it’s not viewed as significant given the selling pressure.

Gold Daily Chart

Gold daily chart

WTI stronger than Brent, but the latter building a bull-flag

WTI recently proved again the strength of the July slope by not only holding it, but also it found a strong bid shortly thereafter. It remains a big ‘line-in-the-sand’ for both sides of the tape. While WTI has been stronger than Brent, the bull-flag forming in the UK contract could make it more appealing from the long-side. It would be ideal for a test of the one-year trend-line before breaking out, but not necessary to turn the bias bullish. A breakout from the bull-flag should have Brent rallying in-line with the longer-term trend.

WTI Crude Oil Daily Chart

WTI crude oil, daily chart

Brent Crude Oil Daily Chart

Brent crude oil, daily chart

Resources for Forex & CFD 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

You can follow Paul on Twitter at @PaulRobinsonFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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