European Open: Gold remains rangebound, $112 pivotal for WTI
Matt Simpson June 28, 2022 6:27 AM
Gold remains stuck in a choppy range which makes it more appealing for range-trading strategies, whilst WTI has risen to a 5-day high and probes a key resistance zone.
- Australia's ASX 200 index rose by 38.3 points (0.57%) and currently trades at 6,744.30
- Japan's Nikkei 225 index has risen by 67.52 points (0.25%) and currently trades at 2,938.79
- Hong Kong's Hang Seng index has fallen by -185.96 points (-0.84%) and currently trades at 22,043.56
- China's A50 Index has fallen by -7.64 points (-0.05%) and currently trades at 14,798.45
UK and Europe:
- UK's FTSE 100 futures are currently down -6.5 points (-0.09%), the cash market is currently estimated to open at 7,251.82
- Euro STOXX 50 futures are currently down -16 points (-0.45%), the cash market is currently estimated to open at 3,522.88
- Germany's DAX futures are currently down -46 points (-0.35%), the cash market is currently estimated to open at 13,140.07
- DJI futures are currently up 12 points (0.04%)
- S&P 500 futures are currently down -4.75 points (-0.04%)
- Nasdaq 100 futures are currently down -0.25 points (-0.01%)
After all of the excitement of late, I suspect we’ve entered a frustrating phase where markets are feverishly seeking a catalyst that doesn’t arrive. And that can see traders hand back profits made in during the previous spell of volatility.
So far this week we have seen Wall Street gap higher then lose those early gains, yet trade within tight ranges. Currency markets lack conviction in either direction, so until we see volatility return and breakouts succeed, the risk is for volatility to remain low.
WTI (4-hour chart):
With that said, oil prices are perking up as the G7 vow to release fresh sanctions on Russia, aimed at curbing their oil export profits. WTI rose to a 5-day high overnight and is close to testing last week’s high (which is a bullish hammer). Prices are also testing the monthly pivot point after last week’s trendline break. A clear break above $112 also clears the weekly R2 pivot and 20-day eMA, which assumes bullish continuation. However, a bearish reversal pattern around or below current levels suggests a swing high is in place.
Gold (1-hour chart):
The ‘Russian gold ban’ was the catalyst that never was. Russian assets have been a no-go since Russia’s invasion, so the G7’s confirmation of a gold ban was a non-event. And that leaves gold where it began the week – in the middle of a choppy range.
Gold remains a traders market – which is vulnerable to false breaks and quick turnarounds on little news. This means range-trading strategies are preferred until we see a catalyst which instils some life back into markets. Key zones to watch reside around 1800, 1820, 1840 and 1845/50.
FTSE 350 – Market Internals:
The FTSE 100 didn’t quite reach 7300 yesterday, but it made a valiant attempt to reach it with a high around 7280. Given the several layers of resistance between 7298 – 7313, the reward to risk ratio appears inadequate for bullish setups around yesterday’s close.
FTSE 350: 4037.48 (0.69%) 27 June 2022
- 275 (78.35%) stocks advanced and 69 (19.66%) declined
- 5 stocks rose to a new 52-week high, 0 fell to new lows
- 19.66% of stocks closed above their 200-day average
- 49.57% of stocks closed above their 50-day average
- 8.26% of stocks closed above their 20-day average
- + 7.91% - ICG Enterprise Trust PLC (ICGT.L)
- + 6.47% - abrdn Private Equity Opportunities Trust plc (APEO.L)
- + 4.97% - Chrysalis Investments Ltd (CHRY.L)
- -3.02% - Helios Towers PLC (HTWS.L)
- -2.84% - Babcock International Group PLC (BAB.L)
- -2.41% - Aston Martin Lagonda Global Holdings PLC (AML.L)
Economic events up next (Times in BST)
How to trade with FOREX.com
Follow these easy steps to start trading with FOREX.com today:
- Open a Forex.com account, or log in if you’re already a customer.
- Search for the pair you want to trade in our award-winning platform.
- Choose your position and size, and your stop and limit levels.
- Place the trade.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.