Commodities may rise if the ECB hints it is preparing to
introduce stimulus measures to battle deepening Eurozone recession,
buoying risk appetite.
Talking Points
- Crude Oil, Gold to Rise if ECB Hints at Stimulus Measures
Ahead
- Trade Balance, Jobless Claims Headline Quiet US Economic
Calendar
Metals are treading water while crude oil is mounting a cautious
corrective recovery after yesterday's aggressive selloff in early
European trade. All eyes are on the European Central Bank interest
rate decision, with traders pining for growth-supportive measures
as the recession in the Eurozone continues to stand as the most
significant obstacle to global growth.
Traders' priced-in expectations as well as economists' baseline
forecasts point away from action this time around however. That
will shift the spotlight to commentary from ECB President Mario
Draghi at a press conference following the meeting.
Clues about forthcoming stimulus measures may boost risk
appetite, sending sentiment-linked crude oil and copper higher.
Gold and silver are likewise likely to advance in such a scenario,
finding de-facto support as the US Dollar declines amid waning
safe-haven demand. Needless to say, a disappointingly hawkish
outcome may yield the opposite reaction.
The US economic calendar is relatively tame, with Trade Balance
and weekly Jobless Claims figures rounding out a limited docket of
event risk. S&P 500 stock index futures are trading flat,
pointing to indecision on the risk sentiment front before the ECB
announcement crosses the wires.
WTI Crude Oil (NY Close): $84.44 // -4.27 // -4.81%
Prices are stalling above the 85.00 figure, a barrier reinforced
by the 50% Fibonacci expansion at 83.76. Initial resistance lines
up at 87.66, the 38.2% Fib, with a break above that targeting a
falling trend line set from late September (now at 91.48).
Alternatively, a break below 83.76 targets the 80.00 figure and
61.8% level at 79.84.
Daily Chart - Created Using FXCM Marketscope 2.0
Spot Gold (NY Close): $17 17 . 75 // + 1 . 75 // + 0 . 10 %
Prices put in a Bullish Engulfing candlestick pattern above
support at 1693.06, the 38.2% Fibonacci retracement, hinting a
bounce may be ahead. Initial resistance lines up at a falling trend
line set from the October 5 swing high (1707.74). A break above
that exposes the 1732.33-35.65 area, marked by a horizontal pivot
level and the 23.6% Fib. Alternatively, a drop below support
targets the 50% level at 1661.32.
Daily Chart - Created Using FXCM Marketscope 2.0
Want to learn more about RSI?
Watch this Video
Spot Silver (NY Close): $31.83 // -0.16 // -0.51%
Prices are retesting the 38.2% Fibonacci retracement at 32.36,
with a break above that exposing the 33.51-66 area marked by the
23.6% level and a former range bottom. Near-term support lines up
at 31.43, the 50% retracement. A push back beneath that targets the
61.8% Fib at 30.50.
Daily Chart - Created Using FXCM Marketscope 2.0
Want to learn more about RSI?
Watch this Video
COMEX E-Mini Copper (NY Close) : $3.442 // -0.064 // -1.83%
Prices are bouncing from support at 3.462, the 50% Fibonacci
expansion. Near-term resistance lines up at 3.550, the 38.2% level,
with a break above that targeting the 23.6% Fib at 3.659.
Alternatively, a break below 3.462 targets trend line support at
3.395 and the 61.8% level at 3.372.
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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