Crude oil and gold prices are poised to end the week on a positive note as sentiment firms across the markets, boosting risky assets and weighing on the Dollar.
Talking Points
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Crude Oil, Copper to Follow Stocks Higher on Firming Risk Appetite
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Gold and Silver Find Support in Ebbing Haven Demand for US Dollar
Commodities are pushing broadly higher ahead of the opening bell in Europe as risk appetite firms across financial markets. Asian bourses added a full percentage point overnight, with telecoms leading the way higher. Newswires chalked up the move to the debut of the iPhone 5, with preorders pointing to strong demand. Investors hope a strong showing will help boost export sales for the device’s component manufacturers, which are scattered across countries from Germany to Taiwan.
Growth-geared crude oil and copper prices are following shares higher while gold and silver are finding de-facto support as the risk-on mood erodes haven demand for the US Dollar. S&P 500 stock index futures are pointing firmly higher in late Asian hours and the economic calendar is light on scheduled event risk, hinting more of the same is likely to carry through into the end of the trading week.
WTI Crude Oil (NY Close): $92.42 // +0.12 // +0.13%
Prices found interim support at 91.56, the 38.2% Fibonacci retracement, after taking out the bottom of a rising channel carved out since early July yesterday. Renewed selling below this boundary targets the 50% level at 88.83. The channel bottom – now at 94.72 – has been recast as resistance. A push back above that aims to challenge a falling trend line set from late February (now at 99.39).
Daily Chart – Created Using FXCM Marketscope 2.0
Spot Gold (NY Close): $1768.60 // -1.80 // -0.10%
Prices continue to stall after taking out resistance at a falling trend line connecting major swing highs since early November 2011. Near-term resistance is at 1790.55, with a break above that targeting 1802.80. The trend line – now at 1757.39 – has been recast as support. A push back below that boundary sees initial downside barriers at 1742.44 and 1719.72, the 14.6% and 23.6% Fibonacci retracements respectively.
Daily Chart – Created Using FXCM Marketscope 2.0
Spot Silver (NY Close): $34.67 // +0.06 // +0.17%
Prices are stalling ahead of resistance at 34.80, the 76.4%Fibonacci retracement, with early signs of negative RSI divergence warning of ebbing upside momentum and hinting a pullback may be ahead. Initial support lines up in the 32.93-33.14 area, marked by a horizontal pivot level and the 61.8% Fib, with a break below this boundary exposing the 50% level at 31.79. Alternatively, a break above resistance aims to challenge 36.89.
Daily Chart – Created Using FXCM Marketscope 2.0
COMEX E-Mini Copper (NY Close): $3.760 // -0.054 // -1.42%
Prices continue to stall below resistance at a falling trend line set from early February (3.833). 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 level. 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
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