Talking Points
- Crude Oil, Copper Follow Stocks Lower on Greek Coalition
Setback
- Gold and Silver Sold as US Dollar Rides Haven Demand
Higher
Commodities are moving lower in early European trade as risk
aversion grips financial markets once again, weighing on
growth-geared crude oil and copper prices and driving safe-haven
flows into the US Dollar, thereby applying de-facto downward
pressure to gold and silver . The rout follows news that Antonis
Samaras, leader of Greece's center-right New Democracy (ND) party,
failed to cajole enough support to form a coalition government
following the weekend's general election.
The task now falls on Alexis Tsipras , the head of the Syriza
party that ran on a platform of renegotiation Greece's obligations
under the EU/IMF bailout program. Investors are concerned that the
elevation of Tsipras will threaten to unravel hard-fought efforts
to keep Greece within the Eurozone and mark the first forcible exit
a country from the currency bloc, a prospect with as-yet
unpredictable implications. The return of UK markets after
yesterday's absence for a bank holiday is likely compounding the
dour mood as London's traders get their chance to price in the
weekend's
worrying news-flow
.
Looking ahead, S&P 500 stock index futures are trading
sharply lower, hinting that current trends are poised to continue
as Wall Street comes online. The US economic calendar offers a
lackluster helping of low-tier economic indicators, suggesting
little stands to derail current momentum. API will also release the
preliminary set of weekly crude inventory figures.
WTI Crude Oil (NY Close): $ 97 . 94 // - 0 . 55 // - 0 . 56
%
The selloff marked by a Harami candlestick pattern
identified last week
found interim support in the 95.78-96.56 area marked by a
horizontal barrier in play since early November 2011 as well as the
100% Fibonacci expansion. A hammer candlestick hints that a bounce
may be ahead. Initial support lines up at 98.89, the 76.4%
expansion, with a break above that exposing the 61.8% level at
100.33. Alternatively, a push through support targets 92.51.
Daily Chart - Created Using FXCM Marketscope 2.0
Spot Gold (NY Close): $1638.55 // -3.67 // -0.22%
Prices are testing support in the 1630.00-1637.73 area marked by
the bottom of a Triangle chart formation carved out since late
March and the 23.6% Fibonacci expansion. The Triangle setup is
typically indicative of continuation, which in this case carries
bearish implications. A break through support initially exposes the
38.2% expansion at 1611.79. Triangle top resistance is now at
1661.75.
Daily Chart - Created Using FXCM Marketscope 2.0
Spot Silver (NY Close): $30.06 // -0.31 // -1.02%
Prices are testing below support at 29.71, with a break lower
exposing the bottom of a falling channel established since early
Mach now at 29.04. Near-term resistance lines up in the 31.20-31.36
area, marked by the channel top and a horizontal former support
level now recast as an upside barrier.
Daily Chart - Created Using FXCM Marketscope 2.0
COMEX E-Mini Copper (NY Close) : $3.724 // +0.052 // +1.40%
Prices are testing through support at 3.713, with a break lower
exposing a rising trend line set from early October now at 3.638.
Initial resistance is found at a shorter-term rising trend line
that formerly acted as support set from mid-March, now at
3.864.
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
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