Technicals | Aug 04 2010
By Rudi Filapek-Vandyck
Crude oil has finally broken through its technical ceiling at US$80/bbl with WTI futures that expire in September closing at US$82.50/bbl in the overnight session.
Chartists at Barclays note this week's surge has pushed crude oil through various layers of what was once technical resistance, such as the 200 day moving average and the June-21 high. However, there's still channel resistance and the swing target at US$82.67 to take care of.
The chartists do not think there's much upside left, not for now. They note daily momentum oscillators are pushing back into overbought territory. Maybe WTI futures can still manage to break through next resistance levels, but at US$83.56 -the 61.8% retracement of the Apr/May decline- this rally should come to its end.
On the other hand, the chartists note price levels will have to fall back below US$79.60 to give the baton for market direction back to the bears.
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Barclays analysts also report they have been frustrated by recent developments in the gold market. They observe gold is back at its 21-day moving average at US$1190 per troy ounce. A break above this level won't turn the underlying trend into a positive one, but it would at least negate the present bearish bias, say the analysts.
Choppy trading within a choppy range are expected to remain in place for gold.
