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The rally in crude oil has come to a pause and with it in recent days price action has been growing increasingly bearish; Brent oil has the best clarity at the moment. Gold may be short-term oversold, but pressure expected to remain, rallies at high risk of failing. The Dow ran into resistance and is now teetering on bullish channel support, U.S. indices may be on the cusp of turning down but have yet to see high conviction evidence just yet that this will be the case.

Technical Highlights:

  • US & UK crude oil contracts wedging up, sitting on support
  • Gold to remain heavy, rallies at risk of failing
  • Dow Jones turns lower, puts bullish channel at risk of breaking

Check out our Trading Forecasts and Educational Resources on the DailyFX Trading Guides page.

US & UK crude oil contracts wedging up, sitting on support

WTI and Brent crude oil are coiling up, with the latter contract having the cleanest pattern. The difference from a trading standpoint lies in which will be the better to get involved with depending on which direction a breakout develops. Brent is set up with support at its feet and just below to hold better should we see weakness, making WTI the better short should a range-break unfold. Brent, with trend and support working well for it, is viewed as the preferred long at this time. The time for a breakout is nearing…

Brent crude oil Daily Chart (Wedge around support)

Brent crude oil daily chart, wedge around support

For an intermediate-term fundamental and technical outlook check out the Crude Oil Forecast

WTI Crude oil Daily Chart (a little weaker than Brent)

WTI crude oil daily chart, could roll over soon

Gold to remain heavy, rallies at risk of failing

Gold may bounce here soon as short-term selling becomes overdone, but generally it looks headed lower. Support lines have been breaking with relative ease of late, indicating the willingness by the market to get out. Rallies are expected to fail and with a little reprieve may set traders up with another opportunity to take advantage of this. The bigger objective at this time is the lower parallel from the summer down in the 1250s.

Gold Daily Chart (to remain heavy)

Gold daily chart, to remain heavy

For an intermediate-term fundamental and technical outlook check out the Gold Forecast

Dow Jones turns lower, puts bullish channel at risk of breaking

U.S. markets are up against resistance but have yet to show any high conviction bearish price action to validate a ceiling. The Dow is teetering on the brink of declining out of a bullish channel, but until it makes a clean break buyers could continue to step up. It’s a tough spot at the moment with resistance just ahead but bullishness keeping market afloat. Traders will be served at the moment by being patient for more clarity.

Dow Daily Chart (Watch channel)

Dow daily chart, watch channel

For an intermediate-term fundamental and technical outlook check out the Global Equities Forecast

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, and trading guides to help you improve trading performance.

We also have a series of guides for those looking to trade specific markets, such as the S&P 500, Dow, DAX, gold, silver, crude oil, and copper.

---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX