Crude oil and copper appear vulnerable to a flare-up of risk
aversion while gold may find support after Bernanke offered no
clues of early QE end.
Talking Points
- Crude Oil and Copper Vulnerable as Traders Ponder Impact of
US Austerity
- Gold, Silver Retain Support as Bernanke Offers No Clues on
Early End of QE
Commodities are putting in a mixed performance in overnight
trade. Crude oil and copper prices are showing little directional
conviction, mirroring European shares. S&P 500 index futures
are accelerating increasingly lower however , hinting risk aversion
is likely to pick up steam and weigh on both sentiment-linked
assets as Wall Street comes online. As we
discussed elsewhere
, the mood may sour as traders ponder on-coming headwinds from US
austerity as the "debt ceiling" and "sequester" battles draw
closer.
The likely response from precious metals seems somewhat clouded
however. Gold and silver are finding nominal support after Ben
Bernanke failed to reinforce hints of early stimulus removal that
emerged in December's FOMC minutes in overnight remarks at the
University of Michigan. That suggests that absent a meaningful move
higher from the US Dollar in the midst of risk aversion, anti-fiat
assets may continue to find support even as risk aversion stings
elsewhere.
WTI Crude Oil (NY Close): $94.14 // +0.58 // +0.62%
Prices took out trend line resistance set from late February,
initially exposing support-turned-resistance at 94.61. A break
above that targets a rising channel top at 96.01. The trend line
(now at 92.84) has been recast as support, with a drop back below
that aiming for the 92.00 figure.
Daily Chart - Created Using FXCM Marketscope 2.0
Spot Gold (NY Close): $1667.85 // +5.05 // +0.30%
Prices are wedged between a major rising trend line set from
mid-May 2012 and the 38.2% Fibonacci retracement at 1674.78.
Resistance is reinforced by a falling trend line established from
the November 23 2012 high. A break higher exposes the 50% Fib at
1689.95. Alternatively, a push below the trend line (now at
1645.95) targets the channel bottom at 1616.31.
Daily Chart - Created Using FXCM Marketscope 2.0
Want to learn more about RSI?
Watch this Video
Spot Silver (NY Close): $31.05 // +0.58 // +1.91%
Prices are testing the 38.2% Fibonacci retracement at 31.19. A
break above that aims for channel midline resistance at 31.53 and
the 50% level at 31.80. Near-term trend line support is at 30.20,
followed by the channel bottom at 29.46.
Daily Chart - Created Using FXCM Marketscope 2.0
Want to learn more about RSI?
Watch this Video
COMEX E-Mini Copper (NY Close) : $3. 634 // -0.0 20 // - 0 . 55
%
Prices are testing below support at 3.620, the 50% Fibonacci
retracement. This barrier is reinforced by a rising channel set
from early November, now at 3.588. A break below the latter level
exposes the 38.2% Fib at 3.569. Near-term resistance is at 3.671,
the 61.8% retracement.
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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