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Gold continues to stay in a very narrow range, building towards a breakout while WTI crude oil prices continue to march on higher towards the summer peak. The S&P 500 is hanging out in record territory and continues to receive the benefit of the doubt for higher prices. The DAX has resistance to contend with but supportive risk sentiment.

Technical Highlights:

  • Gold price range continues to put a stranglehold on outlook
  • Crude oil has eyes for gains to July highs (or better)
  • S&P 500 hanging out in record territory, receives benefit of the doubt
  • DAX runs into confluent resistance, but has supportive risk trends

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 range continues to put a stranglehold on outlook

It’s been a brutally tight range this month, and should it hold through the end of the week it will be the smallest since 1996. This has sidelined traders from having an edge, but the good news is the narrow range, whether it remains through month-end or not, won’t last forever and is likely to lead to a sizable move one resolved. The upside is still favored after the capitulation move last month, but we’ll reserve our outlook until a direction becomes apparent.

Gold Daily Chart (Range continues…)

Gold daily chart, range continues...

See what has been driving Gold in the Quarterly Report

Crude oil has eyes for gains to July highs (or better)

We’ve been leaning bullish crude oil, but not without reservation. If we don’t see a turn lower real soon, then the outlook continues to favor July highs or better. The ‘better’ part might put oil up against the trend-line from 2008, a threshold we were looking at during the summer before pulling back. It would certainly be a big spot to talk about should we see a rally to that point. Near-term support comes in right around 71, resistance around current price, the July high, and 2008 trend-line.

Crude Oil Daily Chart (nearing July highs)

Crude oil daily chart, nearing July highs

Crude Oil Weekly Chart (2008 trend-line)

Crude oil weekly chart, 2008 trend-line

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

S&P 500 hanging out in record territory, receives benefit of the doubt

There is still little reason to bet against U.S. stocks outside of intra-day trades. Between trend in record territory and support just below via the August high and June trend-line there is reason to continue giving the market the benefit of the doubt. A test and rejection of trend support may be the best set-up for would-be longs. Should both levels/lines of support break, only then will we switch gears.

S&P 500 Daily Chart (Supported)

S&P 500 daily chart, supported

DAX runs into confluent resistance, but has supportive risk trends

As discussed earlier this morning, the DAX is coming off a confluence of trend-lines via the one running up from Feb 2016 and down off the June high. This may continue to prove problematic in the near-term. The biggest level of support to watch on weakness clocks in around 12100. Generally speaking, global risk sentiment is firm.

DAX 30 Daily Chart (Confluent t-lines)

DAX 30 daily chart, confluent t-lines as resistance

Check out what has been 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