Crude oil and gold prices may end the week on the upswing as
S&P 500 index futures point to firming risk appetite before the
opening bell on Wall Street.
Talking Points
- Commodities Treading Water Ahead of US Consumer Confidence
Data
- S&P 500 Index Futures Point to Risk-On Mood Prevailing
into Week-End
Commodities are treading water ahead of the opening bell on Wall
Street as traders wait for the release of the University of
Michigan's gauge of US Consumer Confidence . Sentiment is expected
to nudge lower in October after hitting a four-month high in the
previous month. Markets continue to hope a firmer US recovery will
help offset headwinds from a recession in Europe and a slowdown in
Asia. This means soft data from the world's top economy is likely
to carry negative implications for risk appetite.
Such an outcome may weigh on cycle-sensitive crude oil and
copper prices while gold and silver come under pressure as
safe-haven flows buoy the US Dollar. With that said, US economic
data has generally tended to surpass expectations by an increasing
margin over recent weeks (according to data from Citigroup),
meaning the probability of a sentiment-supportive upside surprise
appears credible. Indeed, S&P 500 stock index futures are
pointing higher ahead of the opening bell on Wall Street, pointing
to a risk-on mood that may push commodities higher into the end of
the trading week.
WTI Crude Oil (NY Close): $92.07 // +0.82 // +0.90%
Prices are testing resistance at the would-be neckline of an
inverse Head and Shoulders bottom (92.58), with a break higher
implying a measured upside target at 98.10. Support stands at
87.66, the 38.2% Fibonacci retracement. A drop below that targets
the 50% level at 83.76.
Daily Chart - Created Using FXCM Marketscope 2.0
Spot Gold (NY Close): $1767.35 // +5.00 // +0.28%
Prices pushed lower to support at the bottom of a bearish Rising
Wedge chart pattern (1761.49) after putting in a Dark Cloud Cover
candlestick pattern at resistance in the 1790.55-1802.80 area.
Negative RSI divergence argues in favor of a downside scenario.
Support is reinforced by the 23.6% Fibonacci retracement at
1747.20, with a break below that targeting the 38.2% level at
1717.13. Alternatively, a break above 1802.80 initially targets
1818.95.
Daily Chart - Created Using FXCM Marketscope 2.0
Want to learn more about RSI?
Watch this Video
Spot Silver (NY Close): $33.9 9 // +0. 01 // +0. 03 %
Prices followed the completion of a Bearish Engulfing
candlestick pattern with a drop to range support at 33.66, a
barrier reinforced by the 23.6% Fibonacci retracement at 33.18. A
break below the latter boundary exposes the 38.2% Fib at 31.83.
Negative RSI divergence reinforces the case for a downside
scenario. Near-term resistance stands at the 35.00 figure, with a
break above that initially targeting the October 28 2011 high at
35.66.
Daily Chart - Created Using FXCM Marketscope 2.0
Want to learn more about RSI?
Watch this Video
COMEX E-Mini Copper (NY Close) : $3.752 // +0.034 // +0.91%
Prices continue to consolidate below resistance at a falling
trend line set from early February (3.820). A break higher exposes
swing highs at 3.955 and 3.988. Near-term support lines up at
3.707, the 23.6% Fibonacci retracement. A push below that targets
the 38.2% level at 3.627.
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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