Commodities market tradeable in China tanked on Monday, led by 6% falls in steel and iron ore futures, as concerns about China’s demand extended after the trade balance data came out on Sunday. Speculative funds have rushed into China’s commodities futures market in recent months with an optimistic view of Chinese economy growth. In response to this blinding buying pressure and soaring prices, the Shanghai Futures Exchange increased transaction fees in late April, while Dalian Commodity Exchange raised margin requirements and tightened rules on what is called “abnormal trading”. Continued efforts to monitor the market and curb speculation are being carried out. Iron ore inventories at China’s big ports has been high topping 100 million tons by the end of April, however, the demand for steel will be seasonally weaker over the following three months. As a result, we are expecting the prices will cool down and speculative buyers will be driven away from the market.
Oil price fell sharply overnight by 2.7% to a two-week low, weighed down by uncertainty over Saudi Arabia’s oil policy after replacement of its oil minister. He committed to make Saudi Arabia the most reliable energy supplier, however, indicating his appointment will make no difference to the kingdom’s aggressive policy of forcing rival producers out of the business with cheap oil price. Meanwhile, shifting winds moved wildfires away from oil sands facilities in Alberta, decreasing concerns about the oil production cut in Canada. No significant improvements have been seen in the imbalanced oil market with excessive supply. If the price level of $43/barrel of WTI cannot be held, we can expect for a further drop to $42.5/barrel.
Currency Updates:
Crude Oil (WTI) (M6) Intraday: under pressure
Pivot: 43.77
Our preference: short positions below 43.77 with targets @ 43.14 & 42.50 in extension.
Alternative scenario: above 43.77 look for further upside with 44.33 & 44.88 as targets.
Comment: the RSI is bearish and calls for further downside.
Supports and resistances:
44.88
44.33
43.77
43.36 Last
43.14
42.50
41.95
USD/CAD Intraday: bullish bias above 1.2900
Pivot: 1.2900
Our preference: long positions above 1.2900 with targets @ 1.3020 & 1.3080 in extension.
Alternative scenario: below 1.2900 look for further downside with 1.2830 & 1.2780 as targets.
Comment: even though a continuation of the consolidation cannot be ruled out, its extent should be limited.
Supports and resistances:
1.3130
1.3080
1.3020
1.2958 Last
1.2900
1.2830
1.2780
USD/JPY Intraday: further upside
Pivot: 107.40
Our preference: long positions above 107.40 with targets @ 108.70 & 109.25 in extension.
Alternative scenario: below 107.40 look for further downside with 107.00 & 106.50 as targets.
Comment: technically the RSI is above its neutrality area at 50.
Supports and resistances:
109.90
109.25
108.70
108.38 Last
107.40
107.00
106.50
AUD/USD Intraday: the downside prevails.
Pivot: 0.7385
Our preference: short positions below 0.7385 with targets @ 0.7260 & 0.7190 in extension.
Alternative scenario: above 0.7385 look for further upside with 0.7450 & 0.7515 as targets.
Comment: technically the RSI is below its neutrality area at 50.
Supports and resistances:
0.7515
0.7450
0.7385
0.7312 Last
0.7260
0.7190
0.7105
Gold spot Intraday: under pressure
Pivot: 1271.25
Our preference: short positions below 1271.25 with targets @ 1261.00 & 1253.00 in extension.
Alternative scenario: above 1271.25 look for further upside with 1282.25 & 1289.50 as targets.
Comment: the RSI is mixed to bearish.
Supports and resistances:
1289.50
1282.25
1271.25
1264.25 Last
1261.00
1253.00
1246.25
Important note: These technical and research reports are provided to easy-forex® as a subscriber of third party providers. They are provided for informative purposes only and in no way can they be considered as a recommendation by easy-forex® to you to engage in any trade. Hence, easy-forex® shall not be held responsible for any outcome of trading decisions, in regards with these reports or similar reports. You hereby acknowledge that using the information entailed in these reports is at your sole responsibility and you will have no claims with regards to these reports against easy-forex®. If you do not agree to this, you are strongly advised not to use these reports.
Easy Forex Pty Ltd (AFSL 246566 ABN 73107184510) makes no recommendations as to the merits of any financial product referred to in this website, emails or its related websites and the information contained does not take into account your personal objectives, financial situation and needs. Easy-Forex recommends that you read the Regulation Page, The Product Disclosure Statement, the Terms and Conditions and the Financial Services Guide before making any decision concerning Easy-Forex’s products.