Technicals | Aug 15 2011
By Rudi Filapek-Vandyck
The August volatility in risk assets has caused a shift in the previously bullish stance on industrial metals and for crude oil by the team of technical market analysts at Barclays in London. What crude oil needs right now, argues the team, is for a sharp rally to take prices above former support levels that have now turned into resistance. In the absence of such a rally, however, the analysts preach caution. They believe current signals are neutral at best, and more likely indicative of more weakness ahead.
One of the observations supporting this view is that Brent crude oil futures have been displaying lower tops and lower bottoms throughout this correction. This, argue the analysts, makes the present correction different from the one that took place in between May and January and thus calls for caution.
Technical analysts at Barclays have a similar neutral view on industrial metals, such as aluminium and copper. They retain a positive view on precious metals, pointing out while silver remains range bound between US$37 and 40.00/oz, the outlook for gold remains positive while trading above support at US$1679/oz.
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