Daily Commodity Outlook, July 24 2020

Trading Tips

Stocks in Asia retreated after an unexpected rise in American jobless claims rekindled concern a recovery in the world’s largest economy has stalled. Intel Corp.’s warning on a production delay also weighed on sentiment after triggering an after-hours slump in the stock.

USD continued the slide even when the stock market is down again. Concerns are back on the stalling economic recovery in the U.S.The jobless claims report was so grim — with the ranks of those filing for benefits swelling to 1.42 million. This in some way has increased the possibility that the U.S. interest rate could go negative, which could reduce the attractiveness of the safe haven.

Copper prices tumbled lower, as escalating Sino-US tensions sparked concerns of further retaliation between the world’s two biggest economies. The United States’ move to shut the Chinese consulate in Houston, Texas on Wednesday prompted Beijing to consider closing the U.S. consulate in the central city of Wuhan, triggering a wave of risk aversion in the market. However, we believe that the downside in prices could be limited WITH supply disruption from the world’s top copper producers, Chile and Peru, as they battle the Coronavirus. 

Gold prices continue on its uptrend, nearing its record high on Thursday as investors continue flocking to the safe-haven asset to ride out the Coronavirus pandemic. According to an article by Markets Insider, futures for the precious metal traded as high as $ 1,897.70 per ounce through the session, passing their record close of $ 1,891.90 set in August 2011. Gold contracts’ intraday record, also set about nine years ago, sits at $ 1,923.70 per ounce, just a 1.4% climb from Thursday’s peak. Looking ahead, we maintain a bullish outlook on gold as it is a popular hedge against inflation and currency debasement. 

Oil prices continued to hold its losses overnight as sings of weakness in American labour market casts doubt on the strength of its demand recovery. Adding on to this negative sentiment was that US-China relations deteriorated further. The increase in Jobless claims took some risk-on sentiment out of the markets. Surprisingly however, the CAD held strongly against the USD. This is more due to the fact that the USD was much weaker on negative news and not so much due to the price in oil moving sideways.

Technical & Trade views

USDCAD (Intraday bias: bearish below 1.3414)

We turned bearish as price is retesting our 1st resistance where the horizontal swing high is. Price is likely to drop further from the level towards 1st support.Ichimoku also indicates bearishness.

UKOIL (Intraday bias: bearish below 43.18)

Oil drifted lower. With technical indicators still showing room for further downside potential. A break below downside confirmation at 43.18 will see price drop towards 1st support at 42.67.


XAUUSD (Intraday bias: Bullish above 1883.07) 

Price is facing bullish pressure from our ascending trend line and first support, in line with our 38.2% retracement and horizontal overlap support, where we could see a bounce above this level. A break above our upside confirmation could provide the bullish acceleration to our first resistance level. The Ichimoku cloud is showing signs of bullish pressure as well.

XCUUSD (Intraday bias: Bullish above 2.86093)

Price is facing bullish pressure from our ascending trend line and first support, where we could see a bounce above this level. Ichimoku cloud and 50 period EMA are showing signs of bullish pressure as well.

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