Daily Commodity Outlook, July 16 2020

Trading Tips

Asian stocks started in a mixed way on Thursday ahead of the important GDP data from China. S&P 500 futures went lower after the index gained almost 1% on Wednesday amid optimism about progress in developing a vaccine for the coronavirus.The Federal Reserve said the economy showed signs of a nascent recovery at the beginning of July.

USD continued the slide as the market cheered the good news from the vaccine. Moderna Inc. surged to a record after the drugmaker reported promising trial results. In the meantime, President Donald Trump has indicated to aides that he doesn’t want to further escalate tensions with Beijing, and has ruled out additional sanctions on top officials for now, according to people familiar with the matter. Risk assets are likely to go higher at the cost of safe havens.

Copper prices edged lower as escalating Sino-US tensions clouded any bullish pressure as a result of the supply disruption witnessed in Chile. In line with our fundamentals, prices have room for more downside before reaching a strong support level. 

Gold held steady despite the rally in the equities market seen during the US session yesterday, as concerns about the rising number coronavirus cases and lingering Sino-U.S. tensions clouded investors’ optimism on the developments of the Covid-19 vaccine. 

Oil traded higher overnight before edging lower at the start of the Asian trading session. This comes after OPEC+ alliance confirmed that they would start tapering output cuts starting from next month onwards. Further, official data from the US oil inventory shows that stockpiles fell by another 7.5 million barrels. The CAD strengthened inline with oil along with slightly better than expected core cpi data that was being released.

Technical & Trade views

USDCAD (Intraday bias: bullish above 1.3488)

We turned bullish as price is approaching 1st support where the horizontal  swing low support  is and is likely to bounce off the level towards 1st resistance where the horizontal overlap resistance is. Stochastics also indicates bullishness.

UKOIL (Intraday bias: Bullish above 43.36)

Oil pushed higher and price is currently holding above moving average support. A push up above 1st support at 43.36 towards 1st resistance at 43.89 is expected.

XAUUSD (Intraday bias: Bullish above 1813.47) 

Price is facing bearish pressure from our first support level, in line with our ascending trend line and 38.2% fibonacci retracement and a break above our upside confirmation level at 1813.47 could provide the bullish acceleration to our first resistance level. Ichimoku cloud is showing signs of bullish pressure as well, in line with our bullish bias. 

XCUUSD (Intraday bias: Bearish below 2.88900)

Price is facing bearish pressure from our first resistance in line with our horizontal pullback resistance and 38.2% fibonacci retracement level where we could see a further drop to our first support target. Stochastic is showing signs of bearish pressure as well. 

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