We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Bullish
Gold
Bearish
GBP/USD
Mixed
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • US equities continue to run higher with the Nasdaq 100 setting a fresh all-time-high, not even three months after giving back almost a third of its value in about a month. Get your #Nasdaq technical analysis from @JStanleyFX here: https://t.co/1LI54uvI8x https://t.co/e9FvSLqfaA
  • The US Dollar may be at risk to losses against some of its #ASEAN counterparts. USD/SGD, USD/PHP, USD/MYR and USD/IDR have recently broken to the downside. Will losses continue? Find out from @ddubrovskyFX here: https://t.co/0RTlj6maTT https://t.co/UyQ4i0AihI
  • The British Pound technical outlook still seems to favor the downside. GBP/CAD may pressure key rising support from August as GBP/AUD could prolong its downtrend. GBP/CHF may fall. Get your $GBP market update from @ddubrovskyFX here: https://t.co/hBOpDKXmfW https://t.co/AJlT2YKeCu
  • USD/JPY is approaching medium-term uptrend resistance and while the outlook remains constructive, the advance may be vulnerable near-term while below confluence resistance. Get your $USDJPY technical analysis from @MBForex here: https://t.co/93D7AyhHtG https://t.co/KQcLLrkMP3
  • AUD/USD has had the most impressive show of trend over the past couple of months with the pair gaining almost 1500 pips from the March low. Get your $AUDUSD technical analysis from @JStanleyFX here: https://t.co/vLz4Rpln3u https://t.co/AOwnJja5V8
  • Has the #Euro been saved? Find out from @CVecchioFX here: https://t.co/eiXfOTyGa6 https://t.co/AyRiYpb4cN
  • U.S. Market Analyst at https://t.co/JsVsSmefgR, Shain Vernier covers - ✔️ Safe haven assets in volatile markets ✔️ Central banks and governments ✔️ How will commodities trade in a recession Only on Trading Global Markets Decoded #podcast. Tune in here: https://t.co/1UmEzEbwiy https://t.co/ygwjGNvS61
  • The $USD, Euro, British Pound and Australian Dollar will all be at the mercy of political developments in Asia, Europe and North America this week. An avalanche of PMI data will set the backdrop. Find out from @ZabelinDimitri here: https://t.co/L8cfAgVx94 https://t.co/THWhPAS6AM
  • The price of #gold plunged 1% immediately after the stunning US jobs report crossed the wires. Get your market update from @RichDvorakFX here: https://t.co/8i0L6YIqjy https://t.co/y9dIXazJf9
  • S&P 500, Dow Jones, Nasdaq explode higher with stocks surging in response to shockingly better-than-expected monthly jobs data. Get your #equities market update from @RichDvorakFX here: https://t.co/nuMVWOzzuC https://t.co/M3nGBjd7kZ
Commodities at Risk as Euro Crisis Jitters Threaten Sentiment Trends

Commodities at Risk as Euro Crisis Jitters Threaten Sentiment Trends

2012-10-10 05:45:00
Ilya Spivak, Head Strategist, APAC
Share:

Commodity prices appear vulnerable to risk aversion driven by rising Eurozone sovereign stress. The Fed’s Beige Book is in focus on the economic calendar.

Talking Points

  • Commodities Sold as Risk Aversion Grips Markets in Overnight Trade
  • Fed Beige Book, Costco Q3 Earnings Sought for Global Growth Cues
  • Risk-Off Mood Hinted as Spain CDS Points to Rising Sovereign Fears

Commodities came under pressure overnight as broad-based risk aversion plays out across financial markets. The MSCI Asia Pacific regional benchmark equity index fell 0.8 percent. Newswires cited guidance in the third-quarter earnings report from Alcoa Inc as the catalyst for the dour mood. While the leading aluminum producer’s results beat analysts’ estimates after adjusting for a handful of special items, its forward guidance warned of the dangers posed by a slowdown in China and carried a downgrade in the outlook for demand.

Looking ahead, the spotlight turns to the Federal Reserve as the central bank releases the Beige Book survey of regional economic conditions. Traders continue look toward performance in the US hoping a pickup in the recovery will help offset headwinds facing global output from a recession in Europe and a slowdown in China. The third-quarter earnings report from CostcoWholesale Corp may likewise prove market-moving as traders look to the bulk retailer’s guidance for a reading on consumption trends. The API set of weekly crude oil inventory figures is also on tap.

In the background, an EU Parliament panel and the EU Economic and Monetary Affairs Committee are scheduled to hold parallel debates on Eurozone crisis resolution as banking union proposals. While concrete policy prescriptions are unlikely to emerge, traders will keep an eye on any particularly telling sideline commentary. Spanish Prime Minister Mariano Rajoy is also due to meet with French President Francois Hollande amid hopes Madrid will move forward with requesting a full-on bailout. Such an announcement seems unlikely today, but investors will keep an eye out for any remarks that shape expectations of such an outcome.

S&P 500 stock index futures are in neutral territory, offering little in terms of direction cues, but a pickup in Spanish CDS spreads warns Eurozone sovereign jitters are on the rise. This hints the risk-averse mood may carry forward into the opening bell on Wall Street, an outcome that stands to weigh sentiment-sensitive crude oil and copper prices. Meanwhile, gold and silver may see de-facto selling pressure as haven demand bolsters the US Dollar. Needless to say, a reversal toward a risk-positive posture stands to produce the opposite outcome.

WTI Crude Oil (NY Close): $92.39 // +3.06 // +3.43%

Prices are testing minor falling trend line resistance at 92.80 that has capped gains over recent weeks. A break higher targets the 94.00 figure, followed by the underside of a rising channel set from early July (now at 97.49). Near-term support is at 87.70, the 38.2%Fibonacci expansion, with a push below that targeting the 50% level at 83.76.

Commodities_at_Risk_as_Euro_Crisis_Jitters_Threaten_Sentiment_Trends_body_Picture_3.png, Commodities at Risk as Euro Crisis Jitters Threaten Sentiment Trends

Daily Chart - Created Using FXCM Marketscope 2.0

Spot Gold (NY Close): $1764.30 // -10.65 // -0.60%

Prices continue to push lower after completing a bearish Dark Cloud Cover candlestick pattern below resistance in the 1790.55-1802.80 area, a setup reinforced by negative RSI divergence. Sellers have now cleared the bottom of a Rising Wedge chart pattern, exposing the 23.6% Fibonacci retracement at 1747.20 as the next downside objective. The Wedge bottom, now at 1772.09, has been recast as near-term resistance. A push back above that threatens 1790.55-1802.80 anew.

Commodities_at_Risk_as_Euro_Crisis_Jitters_Threaten_Sentiment_Trends_body_Picture_4.png, Commodities at Risk as Euro Crisis Jitters Threaten Sentiment Trends

Daily Chart - Created Using FXCM Marketscope 2.0

Want to learn more about RSI? Watch this Video

Spot Silver (NY Close): $33.91 // -0.07 // -0.21%

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.

Commodities_at_Risk_as_Euro_Crisis_Jitters_Threaten_Sentiment_Trends_body_Picture_5.png, Commodities at Risk as Euro Crisis Jitters Threaten Sentiment Trends

Daily Chart - Created Using FXCM Marketscope 2.0

Want to learn more about RSI? Watch this Video

COMEX E-Mini Copper (NY Close): $3.718 // 0.000 // 0.00%

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.

Commodities_at_Risk_as_Euro_Crisis_Jitters_Threaten_Sentiment_Trends_body_Picture_6.png, Commodities at Risk as Euro Crisis Jitters Threaten Sentiment Trends

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 Twitter at @IlyaSpivak

To be added to Ilya's e-mail distribution list, send a note with subject line "Distribution List" to ispivak@dailyfx.com

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.