Daily Commodity Outlook, June 25 2020

Trading Tips

Asian stocks dropped amid worries about a resurgence in virus cases in  many U.S. states. Japanese, Australian and Korean shares were all down more than 1%. China and Hong Kong are closed for holidays. Futures on the S&P 500 dipped as well as the worries over second infections dampened. The risk-off sentiment is coming back to the market.

The dollar extended gains benefiting from the revived risk aversion. Market sentiment is rapidly turning negative on concern that the spreading coronavirus could force policy makers to slow the pace of economic reopenings. Safe haven assets are on a rise due to this negative outlook.

Copper prices plunged as we witnessed a second wave of risk aversion flooding back into the markets, with growing concerns that we could be witnessing a second wave of pandemic which could hamper the global economic recovery. In line with our fundamentals, price broke our trend line and is facing bearish pressure from our resistance where we could see a further drop. 

Gold prices edged higher, driven by concerns over rising coronavirus cases which dented hopes of a swift economic recovery, buoying demand for the safe-haven metal. Elsewhere, the International Monetary Fund (IMF) slashed its 2020 global output forecasts further as the economic damage from the pandemic could be worse than expected. Meanwhile, we maintain a bullish bias on Gold as it is seen as a safe haven asset and could benefit from the widespread stimulus measures adopted by central banks as it is widely viewed as a hedge against inflation and currency debasement.

Oil prices showed its biggest drop over the last two weeks as further reports of swelling US crude stockpiles, coupled with a fresh surge in coronavirus cases across the nation raised new concerns about oil demand. Despite the drastic production cuts taken by OPEC+ coalition, the IMF further revised their prediction that the global economy is looking at a significantly deeper recession than originally anticipated. The CAD weakened greatly overnight as well in line with the drop in oil prices.

Technical & Trade views

USDCAD (Intraday bias: bullish above 1.3618)

We turned bullish as price is approaching 1st support where the horizontal pullback support is. Price is likely to bounce off the level towards 1st resistance where the horizontal overlap is.

UKOIL (Intraday bias: Bullish above 40.68)

Oil drifted lower as expected. However with price now holding above key Fibonacci support and 1st support, a short term bounce above 39.96 is expected. Stochastics is testing support as well where price reversed in the past. Breaking above upside confirmation at 40.68 will strengthen bullish bias and see price rise further towards 1st resistance at 42.28.

XAUUSD ( Intraday bias: Bullish above 1751.59)

Price is approaching our first support where we could see a bounce above this level to our first resistance level. Ichimoku cloud and RSI are showing signs of bullish pressure in line with our bullish bias. 

XCUUSD ( Intraday bias: bearish below 2.64843)

Price is facing bearish pressure from our intermediate resistance, in line with our horizontal swing high resistance and 38.2% fibonacci retracement, where we remain bearish below this level and could see a further drop to our first support level, in line with our horizontal swing low support and 50% fibonacci retracement and 100% fibonacci extension. Stochastic is facing bearish pressure from our resistance as well. 


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