XAU/USD

Daily Timeframe.

Kicking things off with spot gold. In dollar terms, the XAU/USD aimed at the $1,999 5 May low on Tuesday and probed space south of the aforementioned low. As noted in recent analysis, which can be found here, I emphasised the point that should the yellow metal seek space beneath $1,999, this would unearth a potential bearish setting (albeit against the current uptrend that has been active since September 2022). As a result of recent action, sellers may take command and target support from $1,982, which happens to share chart space with a 100% projection at $1,983 (equivalent AB=CD support).

In the event of a follow-through move to the downside beyond here, the technical radar will shift toward support at $1,949, a level bolstered by trendline support taken from the low $1,616 and a 1.618% Fibonacci projection at $1,944 which many harmonic traders will recognise as an ‘alternate’ AB=CD bullish configuration.

If you check the H1 chart, as of writing price is on the verge of closing beneath $1,999. Therefore, short-term players may look for a retest of the breached level to play out before committing and aiming at the daily support mentioned above at $1,982.

WTI Oil

Daily Timeframe.

The price of oil has been on a downward slide since topping at $126.35/bbl, pencilling in a series of lower lows and lower highs since March 2022.

I did note that since the unit chalked up a lower low at $63.94 (4 May), a move which reaffirmed the market’s bearish bias, a sell-on-rally scenario could emerge from the demand-turned-supply zone at $72.63-$74.36. As you can see, this did indeed take shape and sellers put in a reasonably strong appearance from the zone. The question is whether sellers have enough gas in the tank to take things beyond $63.94 to shake hands with support coming in from $62.36.

Another key observation on the daily chart is resistance nestled directly above $72.63-$74.36 at $75.60. This, in fact, is what I would term a decision point that was shaped before breaking below $72.63-$74.36, therefore whipsawing north of the aforementioned area (and consuming any stops) into $75.60 may be enough to trigger a stronger, more meaningful downside move. Time will tell. Regardless, this remains a bearish market for now, favouring a push towards fresh lows.

XAG/USD

Daily Timeframe.

I also wrote about spot silver in recent analysis, which can be found here.

As noted, XAG/USD probed south of a neckline ($24.51) of a double-top pattern formed around resistance at $25.85. As evident from the chart, sellers remain determined to explore deeper water and test the mettle of nearby support, shaped by way of a long-term trendline resistance-turned-support taken from the high of $30.14, closely followed by the double-top pattern’s profit objective at $22.89. Although a retest of the neckline could still unfold, it is unlikely before we touch the aforesaid trendline support.

However, I made it clear in previous writing that the trend in this market is similar to gold: northbound. Consequently, testing the space seen between the trendline support and the pattern’s profit objective (circled) could be enough of a technical floor to encourage not only dip buying, but also short covering.

Charts: TradingView

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