Gold continues to battle at a major trend-line and December low; can it gain its footing or will it succumb to selling under 1236? The nasty crude oil spill has a major one-year slope in view for the US contract, while the UK contract snaps a trend-line from June of last year. Global equity markets are generally quiet; DAX at resistance, Dow is too (sort of).
Technical Highlights:
- Gold price battling at 2015 trend-line, December low
- Crude oil’s nasty spill has a trend-line, slope in focus
- DAX at resistance, Dow is too (sort of)
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Gold price battling at 2015 trend-line, December low
Gold continues to flirt with breaking major long-term support via the 2015 trend-line, and further adding weight to the 1230s is the confluence with the December low at 1236. So far, we are seeing the precious metal hold, but not with a lot of buying interest yet.
It may take a little time for confidence to come back into gold if it is does, but the longer it fails to garner upside momentum the more likely it is that we’ll see a breakdown below support. A daily close below 1236 should have recent buyers back on the run with sellers back in control.
Gold Daily Chart (trend-line, December low)
For more in-depth fundamental and technical analysis, check out the Q3 Forecast for Gold
Crude oil’s nasty spill has a trend-line, slope in focus
Admittedly, recently we were looking for US crude oil to consolidate around 74 before making one more push to the 2008 trend-line (~78/79) before rolling over. Instead, the consolidation turned into a mini-top, and now we are looking at familiar line of support once again.
The slope rising up from July of last year lies down around 66, and its importance is not to be taken lightly. The numerous touches over the past year indicate this much. A drop from here into that line could give dip-buyers another shot at a long, even for an oversold bounce off the high. Fresh swing-shorts don’t have much appeal here with risk/reward lacking, but very short-term momentum traders still have some room to play with.
US Crude Oil Daily Chart (July slope coming back into view)
The UK contract (Brent crude oil) broke an important trend-line yesterday, putting it at risk of soon seeing the 200-day MA in the 68s. There is support, however, around 71 (highs from Jan/Mar) before reaching down there, but the break and momentum may be too much for it to hold. The US contract having more room to go before the July slope also suggests Brent will break those old highs.
UK Crude Oil Daily Chart (June trend-line broken)
For more in-depth fundamental and technical analysis, check out the Q3 Forecast for Crude Oil
DAX at resistance, Dow is too (sort of)
At this time, equity indices are difficult to navigate in a summer trading environment without a catalyst. The DAX is currently trading around resistance in the 12550/600-area. A turn lower from here looks most probable, but we’ll first need to snap the 100-point range it’s been stuck in since the early-part of Friday’s session.
DAX Daily Chart (Resistance, 12550/600)
The Dow is at trend-line resistance off the highs, with a turn down possibly helping fill out more of the developing triangle formation since earlier this year. Trading has been light, bringing limited confidence in either direction. For now, it’s not a bad idea to lay low in indices until we see better price action. Crude oil and gold are the two in play of the markets we looked at today.
Dow Jones Daily Chart (Trend-line, triangle forming)
For more in-depth fundamental and technical analysis, check out the Q3 Forecast for Global Equity Indices
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
