With an almost flat trading day seen in Monday's trading session, gold could be preparing to begin a recovery of its short-term declines activated from the $1,226 level. With the presence of rejection candles seen on the daily and four-hour charts, the commodity may be struggling to put in a temporary bottom and possibly begin a recovery higher.
If that occurs, risk of corrective upside gains could shape up toward the $1,072.99 level and then the 1,073.95 level. We expect that level to reverse roles and provide support. Silver is also seen hesitating following its sharp selloff last week.
It is now trading flat after a run to as high as $15.10 today. Though retaining its broader downside bias, the formation of hammer on Friday could be warning us of an impending corrective recovery in the coming days possibly toward the $15.49 level but if that fails to occur, further downside prices will be targeted.
Crude oil is weakening, but above its recent low at $69.69. While broader risk remains lower, we think the commodity should correct its declines triggered off the $83.93 level in the days ahead. Wheat is also on the recovery path, as it was seen strengthening in early trading today, suggesting it could see further upside after declining for several weeks to touch a low of $482 last week.
Corn traded to an intraday high of $362 before backing off today. It is currently trading at the 356 level as at the time of this analysis. Overall, we are seeing consolidation after our model's recent weakness, though still vulnerable. We look for consolidation to a corrective up move in the coming days.
Mohammed Isah is a technical strategist and head of research at FXTechstrategy.com, a technical-research Web site. He has been trading and analyzing the foreign exchange market for the past seven years. He formerly traded stocks before crossing over to the forex market, where he worked for FXInstructor LLC as a technical analyst and head of research before joining FXTechstrategy.com. He has written extensively on the forex market and technical analysis and his articles have been featured in The Technical Analyst Magazine, The Forex Journal Magazine, The International Business Times and FXstreet.com. At FXTechstrategy.com, he writes daily, weekly and long-term technical commentaries on currencies and commodities, which are offered to its clients. He also produces
for his subscribers. He provides full coverage of the forex market with specific focus on G10 currencies as well as the commodities markets, with focus on five key commodities.