Commodities | Brent Crude Oil, Rhodium ETF, Gold-Silver Ratio
Brent Crude Oil – Temporary Resistance Zone
Brent has has broken out of the downward trending channel in place since 20 February 2020 however now faces resistance at prior levels of interest, that being:
(1) the resistanc zone of 16 March
(2) the breakdown level of 13 and 14 April
(3) the 50-day exponential moving average
On Wednesday and Thursday we saw rejection candles being printed, while a break below the 8-day EMA would would see the channel breakout level being re-tested. This level is in line with the 0.50-0.618% FIB Retracement.
Traders, monitor this one for support and potential reversal. A review of the historical daily chart of ETFRHO sees the price having respected the 200-day simple moving average support zone. Continuing to trend up, Wednesday 06 May and Thursday 07 May saw the price find support at this level once again. Since peaking on 09 March, the price has remained below the downward trend trend, however, traders should be cognizant of potential price action where a breach of the medium term bear trend is possible. As the 200-day sma is not set in stone, traders should bear in mind that a move below this level is possible before a fresh short to medium term reversal recommences where our signal would be a breach of the downward trend line A_B. As per the daily chart, I have illustrated a potential action scenario (buy/long).
On 23 January, the Gold/Silver Ratio flagged a potential upside break, i.e. at the time Gold to outperform Silver (https://online.unum.co.za/commodities/commodities-gold-silver-ratio-look-closely-at-that-volatility). Since then we have see the price appreciate strongly, with a 50% to the most recent highs. At current levels, the price has developed and broken down from a bear flag technical formation, with the price also below it’s 8 and 21 exponential moving average. The daily RSI is also at 44 and trending lower suggesting weakness for Gold versus Silver on a relative basis.
Trading Desk Analyst
Unum Capital (Pty) Ltd
An Authorised Financial Services Provider (FSP 564)