Gold in a quiet mode
Gold traded in a consolidative manner on Monday, remaining between the 1160 (S1) hurdle, which happens to be the 61.8% retracement level of the October 2008 – September 2011 major advance, and the key support-turned-into-resistance barrier of 1180 (R1). If the bears are strong enough to overcome the 1160 (S1) I would expect them to target the low of the 19th of April 2010, at 1125 (S2). I believe that as long as the 1180 line holds as a resistance, the outlook of the precious metal remains negative. However, bearing in mind our momentum signs, I would be watchful of a possible upside corrective wave before the bears pull the trigger again. The RSI appears willing to exit its oversold territory any time soon, while the MACD just crossed above its signal line.
• Support: 1160 (S1), 1125 (S2), 1100 (S3).
• Resistance: 1180 (R1), 1205 (R2), 1222 (R3).
WTI breaks below 79.40
WTI dipped below 79.40 (R1), the lower bound of the sideways range it’s been trading recently, as Saudi Arabia cut prices for crude exports to US customers. The fall found support near the 78.00 (S1) line, where a clear break could have larger bearish implications and perhaps pave the way towards the psychological zone of 75.00 (S2), defined by the lows of October 2011. The plummet below the 79.40 (R1) barrier confirmed a forthcoming lower low on the daily chart and turned the bias back to the downside in my view. Moreover, the 14-day RSI moved lower and appears willing to enter again its oversold field, while the daily MACD, already negative, has turned down and could cross below its signal line any time soon. This shows accelerating bearish momentum and magnifies the case for further declines in the close future.
• Support: 78.00 (S1), 75.00 (S2), 71.00 (S3).
• Resistance: 79.40 (R1), 81.00 (R2), 83.50 (R3).