Sunday, July 30, 2017
Oil and Gold to form intermediate top
Both oil and gold have been in a mild uptrend for over a year now moving up and down in waves. It has been a time where you would have made more money by buying the commodities than selling them. However, if you are intermediate or short term trader you might see that playing on both sides would have been a good choice. Looking purely technically you can spot waves on both commodities. Taking that into account I will state that we will probably see gold and oil turn around in August and start trending down. I expect oil to top at around 50.00 this week and gold possibly too at 1270-1275 level.
If you look at gold chart below you can see three finished peaks. However, the second and the third peak are at about the same price level (the third is some 30 cents higher). Then you will spot a lower low formed and a rally right after it. I assume we will now see another leg down, that will take us lower to 1195-1180 level. I expect the fourth peak to be finished this week. I have intentions to short gold when I see strong selling on my short term hourly charts.
The same is true with oil. Oil chart actually more resembles head and shoulders pattern. You can spot around 5 technical peaks in the chart, with the last two peaks being lower than previous two ones. This leads me to a conclusion that another peak in oil is due any time soon. I actually think 50 level is the mark and oil may form its first leg down this week. Again, I intend to be a seller when I see strong selling coming on hourly charts.
At some point both commodities will pick up and start trending up, because the world geopolitical and economical situation does not look rosy at all, but for the time being, technical analysis tells me to be on the short side.
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