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Gold price has potential to go either way right now, a couple of different chart configurations could be in the works. Crude oil in the near-term is a difficult handle, but could be in the process of carving out a broader bearish formation. The DAX is between levels, more selling is favored towards big long-term support, while the Nasdaq 100 hangs precariously on the edge of a chart pattern under construction since early this year.

Technical Highlights:

  • Gold price stabilizing, two chart patterns to watch
  • Crude oil tough in near-term, big-picture top in the works?
  • DAX looks heading lower towards big support test
  • Nasdaq 100 hangs precariously as rising wedge nearly triggered

See how the majority of traders are positioned in various markets/currencies and what it says about future price fluctuations – IG Client Sentiment

Gold price stabilizing, two chart patterns to watch

Gold is stabilizing at the moment, but has two potential chart patterns. The head-and-shoulders possibility, if the neckline is broken, will of course have bearish implications. The wedge scenario could go either way, however; it is seen as more probable to lead to another leg higher.

In any event, we have signposts to help guide us. If the neckline is broken and 1189 taken out, then the path of least resistance is lower. If, however, a matured wedge comes into play we will run with whatever direction the eventual breakout points to.

Gold Price 4-hr Chart (H&S or Wedge?)

Gold 4-hr chart, head-and-shoulders or wedge?

See what is driving Gold in the Quarterly Report

Crude oil tough in near-term, big-picture top in the works?

Crude oil hasn’t been the easiest handle in the short-term, but could carve out a rather significant top with a little more weakness. WTI is currently testing the July 2017 slope, and will remain support for as long as it holds, which offers ‘would-be’ longs good risk/reward at this juncture.

A break of the slope will quickly bring into play the June 2017 trend-line and 200-day MA. If the prior levels/lines break, then the big-picture head-and-shoulders becomes a serious consideration. For now, though, oil is well supported with three degrees to hang on to.

Crude Oil Daily Chart (Slope/t-line support, H&S potential if breaks)

Crude oil daily chart, has support at feet but if breaks then H&S potential grows

What is driving Crude Oil this quarter? See the Quarterly Report for details.

DAX looks heading lower towards big support test

As we discussed this morning, the DAX is set up to trade lower and test big support down in the 11726/600-area. With the 12104 level and descending wedge-break in the rear-view mirror, the path of least resistance towards a big support test favors short-sellers. Should we get down to the neckline of the broad head-and-shoulders formation we’ll discuss it in further detail.

DAX Daily Chart (Between levels, big support test looks next)

DAX daily chart, trading between levels, big support text looks next

Nasdaq 100 hangs precariously as rising wedge nearly triggered

The Nasdaq 100 is teetering on the edge of a large rising wedge. As we discussed last week, if the market-leader-led index starts to break down out of this broad topping pattern, bad things are likely to happen not only in the U.S. but across the globe as well.

A break below 7312 will confirm not only the wedge but also cement a lower low for the first time since the rise out of the April low. Given the nature of these patterns, a sharp break would likely unfold at that point.

Nasdaq 100 Daily Chart (Rising wedge)

Nasdaq 100 daily chart, teetering on brink of dropping out of rising wedge

Check out what is driving global equities in our Quarterly Report

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

You can follow Paul on Twitter at @PaulRobinsonFX