Intraday Market Analysis: Crude Oil and Gold Technical Coverage

Gold Intraday Strategy

Gold has enjoyed safe haven in demand when news broke that Qatar is being isolated by several countries in the middle east. Since the Fed rate hike XAU/USD retraced from its yearly high to current levels. In our intraday strategy for the commodity we focus on the recent recovery.

XAU/USD 4hr Chart

Please click on the chart to enlarge:

Gold 4hr Chart 25/06/17

We have noted a reversed Head-And-Shoulders (H&S) reversal pattern that was affirmed during Friday’s session. A break above the neckline was affirmed, which may suggest further gains are in store.

What is often seen in similar breakouts is a re-test of the neckline although it is not guaranteed to materialize. The 21 Moving Average (MA, in purple) may provide the required support. It is possible for the price to temporarily break below the neckline (which may trigger weak stops) but the 21MA may hold on the first test.

The initial target of the bullish reversal is seen at 1,263.00, which may act as a firm resistance. Should gold succeed in breaking above the 1,263.00 it may pave the way for stronger gains towards 1,270.00, which is expected to hold on first test.

There are many key economic figures this week that may trigger some volatility in gold, pinpointing a specific event is a difficult task. One of these key figures is the US Advance GDP, due on Thursday.

Crude Intraday Strategy

Crude oil (nymex) was heavily sold throughout the past week. In our prior crude oil strategy we expected the weakness to continue but the price failed to correct higher, which may have provided a decent entry in the commodity.

The intraday strategy was also combined with the monthly chart although we are only displaying the 4hr chart. The established downtrend has been affirmed since the end of May. Based on the monthly chart the downtrend may have come to an end. It is too early to forecast a moderate recovery on a monthly level at the time of this writing.

Crude Oil 4hr Chart

Please click on the chart to enlarge:

Crude Oil 4hr Chart 25/06/17

A break above 43.75 is required in order to negate the established downtrend. Once the breakout is affirmed (preferably a 4hr close) may indicate corrective gains are due to materialize. The target for the corrective gains is seen at 45.38. A monthly close above 45.38 may be an early indication a significant rally is due to take place in crude oil. however, we will re-assess our position on crude oil across a number of time frames at the monthly close.

There were reports OPEC may be considering deeper production cuts in order to sustain crude oil prices. This is irrelevant to the current strategy as any cuts may only be announced in August.

In an event 43.75 is tested by the market and holds it may be insufficient to provide a short entry as we are also basing our analysis on the monthly chart that suggests a bullish reversal is due. An intraday breakout nevertheless is still required.

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