Crude Oil, Gold Look To US Earnings Calendar For Direction Cues

DailyFX
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Talking Points

  • Crude Oil, Copper Look to US Earnings Calendar to Set Sentiment Trends
  • Gold and Silver Look to US Dollar for Risk Appetite Trends Transmission

Commodity prices are little changed in early European trade, reflecting directionless risk sentiment trends projected via flat S&P 500 stock index futures. A quiet US economic calendar keeps the focus on the earnings calendar, with cycle-sensitive names including Halliburton and Dover as well consumption-trend proxies like Yum! Brands and American Express on tap.

So far, the twenty-nine S&P 500 companies to report first-quarter outcomes have produced mixed results: earnings growth slumped 0.5 percent on average, but this marked a 4.6 percent outperformance relative to expectations. Broadly speaking, traders are looking to the reports for answers to a familiar question: can a stronger recovery in the US offset a recession in the Eurozone and a slowdown in China this year?

Crude oil and copper remain closely correlated with the S&P 500, hinting shares’ response to today’s earnings reports will see direct reflection in prices for the growth-driven commodities. Meanwhile, gold and silver continue to look to the US Dollar for direction cues. For its part, the greenback, continues to show a meaningful inverse relationship with share prices, hinting a sentiment-supportive set of reports is likely to weigh on the benchmark currency while bolstering precious metals (and vice-versa).

WTI Crude Oil (NY Close): $104.20 // +1.27 // +1.23%

Prices are testing resistance at 104.90 after putting in a Bullish Engulfing candlestick above rising trend line support set from mid-December. A break above this level exposes falling trend line barriers at 105.61 and 106.70. Support is now at 101.22.

Crude_Oil_Gold_Look_to_US_Earnings_Calendar_for_Direction_Cues_body_Picture_3.png, Crude Oil, Gold Look to US Earnings Calendar for Direction Cues

Daily Chart – Created Using FXCM Marketscope 2.0

Spot Gold (NY Close): $1649.57 // -2.30 // -0.14%

Prices put in a Bearish Engulfing candlestick pattern below falling trend line resistance set from early March. Initial support has been found at 1638.02, the 23.6% Fibonacci expansion. A break below this exposes the 38.2% level at 1612.02. Trend line resistance is now at 1670.97.

Crude_Oil_Gold_Look_to_US_Earnings_Calendar_for_Direction_Cues_body_Picture_4.png, Crude Oil, Gold Look to US Earnings Calendar for Direction Cues

Daily Chart – Created Using FXCM Marketscope 2.0

Spot Silver (NY Close): $31.68 // +0.18 // +0.57%

Prices continue to consolidate below resistance at 32.93, the former neckline of a Head and Shoulders (H&S) top carved out between late January and mid-March, and horizontal support at 31.04. A break blower exposes the first downside barrier at 29.79. The H&S setup broadly implies a measured downside target at 26.84.

Crude_Oil_Gold_Look_to_US_Earnings_Calendar_for_Direction_Cues_body_Picture_5.png, Crude Oil, Gold Look to US Earnings Calendar for Direction Cues

Daily Chart – Created Using FXCM Marketscope 2.0

COMEX E-Mini Copper (NY Close): $3.648 // +0.020 // +0.55%

Prices put in two back-to-back Hammer candlesticks above rising trend line support set from early October, hinting a move higher may be ahead. Initial resistance lines up at 3.716, the 38.2% Fibonacci retracement. A break above this barrier exposes the 50% level at 3.761. Trend line support is now at 3.621.

Crude_Oil_Gold_Look_to_US_Earnings_Calendar_for_Direction_Cues_body_Picture_6.png, Crude Oil, Gold Look to US Earnings Calendar for Direction Cues

Daily Chart – Created Using FXCM Marketscope 2.0

— Written by Ilya Spivak, Currency Strategist for Dailyfx.com

To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak

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