Commodities Sold on Eurozone Data purpose QE3 Bets May Spark Bounce

Talking Points
Crude Oil, Copper Hurt by Eurozone Data But May Bounce with ISM Result Gold and Silver May Rise if Another Soft US Data Point Boosts QE3 Outlook Commodity prices are under pressure in European trade as broadly soft economic data out of the Eurozone reminded investors that aside from sovereign risk and structural concerns (at least as it relates to Greece), the region is also sinking deeper into an economic slump that is weighing on global performance at large. Revised Eurozone PMI figures pointed to likely recession in the second quarter while German factory orders and region-wide retail sales figures disappointed expectations. Looking ahead, S&P 500 stock index futures have erased earlier gains and now point firmly lower, hinting continued selling may be ahead.
The landscape may quickly change with the release of the ISM Non-Manufacturing Composite gauge however. Median forecasts call for a print at 53.5 in May, matching April’s result. An outcome in line with expectations is unlikely to spark fireworks but a disappointing result may counter-intuitively boost risk appetite while applying downward pressure on the Dollar in the context of the QE3-driven theme at play this week. That would have scope to boost sentiment-linked crude oil and copper prices while offering a lift to gold and silver as precious metals are once again sought out for their store-of-value appeal.
WTI Crude Oil (NY Close): $83.98 // +0.75 // +0.90%
Prices put in a Hammer candlestick above support at 83.34, the 76.4% Fibonacci retracement, hinting an upswing is ahead. Highly oversold RSI studies reinforce the risk of a rebound. Initial resistance lines up in the 90.14-88.54 area, marked by the early September swing top and the 61.8% Fib. Alternatively, a break lower initially exposes 80.16.

Daily Chart - Created Using FXCM Marketscope 2.0
Spot Gold (NY Close): $1618.85 // -5.25 // -0.32%
Prices are testing resistance at a falling trend line set from early March, now at 1628.65. The barrier is reinforced by the 76.4% Fibonacci retracement at 1637.35, with a break higher exposing the May 1 high at 1671.49. Near-term support lines up at 1616.23, the 61.8% Fib, with a break below that opening the door for a test of the 1600/oz figure.

Daily Chart - Created Using FXCM Marketscope 2.0
Spot Silver (NY Close): $28.25 // -0.27 // -0.93%
Prices are drifting sideways above support at 27.06, with gains still capped at 28.70. A break lower initially exposes the 26.05-15 area. Alternatively, a push higher through resistance opens the door for a challenge of 29.71.

Daily Chart - Created Using FXCM Marketscope 2.0
COMEX E-Mini Copper (NY Close): $3.308 // -0.006 // -0.18%
Prices broke through support at 3.426, the 76.4% Fibonacci retracement, with sellers now testing the double bottom at 3.250. A break below this boundary exposes the 123.6% Fib expansion at 3.080. The 3.426 level has been recast as near-term resistance.

Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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>> Commodities May Recover from Early Losses as QE3 Bets Rebuild

Crude Oil, Copper Sold as China Services PMI Compounds Growth Fears Gold and Silver Expected to be Well-Supported as QE3 Speculation Returns feeling-linked crude oil and copper pricesare under pressure in European trade after soft Chinese service-sector data released over the weekend compounded Friday's dismal US jobs report to weigh on risk appetite. Gold and silver are likewise trading lower as the dour mood drives haven-seeking capital flows into the US Dollar, but the metals are holding up markedly better overtly growth-geared raw materials.
Gold and silver appear likely to remain well-supported in the near term as signs of weakness in US data stoke QE3 expectations and weigh on the greenback. Although another Fed stimulus program seems highly unlikely with the benchmark 10-year Treasury yield already near record lows courtesy of the Eurozone debt crisis, speculation is likely to metastasize regardless heading into Thursday's Congressional testimony from Fed Chairman Ben Bernanke.
Signs of a QE3-themed boost to sentiment seem to be already emerging as S & P 500 stock index future trim losses sustained earlier in the session while the Dollar gives away the lion's share of intraday gains versus most its leading counterparts. US Factory Orders figures are in the spotlight on the economic calendar, with a modest 0.2 percent increase expected. While a print in line with forecasts is unlikely to prove materially market-moving, a disappointing outcome may amplify pressure on the Dollar while boosting metals given the current environment.
WTI Crude Oil (NY Close): $83.23 / /-3.30 / /-3.81%
Prices are testing through support at 83.34, the 76.4% Fibonacci tracing, with a break below this boundary exposing 80.16. Highly oversold RSI studies warn that the risk of a corrective rebound may be swelling. Near-term resistance lines up in the 90 14 - 88 54 area, marked by the early September swing top and the 61.8% Fib.

Daily Chart - Created Using FXCM Marketscope 2.0
Spot Gold (NY Close): $1624.10 / / + 63.68 / / + 4.08%
Prices are testing resistance at a falling trend line set from early March, now at 1630.24. The barrier is reinforced by the 76.4% Fibonacci tracing at 1637.35, with a break higher exposing the May 1 high at 1671.49. Near-term support lines up at 1616.23, the 61.8% Fib, with a break below that opening the door for a test of the 1600/oz figure.

Daily Chart - Created Using FXCM Marketscope 2.0
Spot Silver (closed NY): $28.51 / / + 0.81 / / + 2.92%
Prices are drifting sideways above support at 27.06, with earnings still capped at 28.70. A break lower initially exposes the 26 05-15 area. Alternatively, a push higher through resistance opens the door for a challenge of 29.71.

Daily Chart - Created Using FXCM Marketscope 2.0
COMEX E-Mini Copper (Close NY): $3.314 / /-0.052 / /-1.54%
Prices broke through support at 3.426, the 76.4% Fibonacci tracing, with sellers now testing the double bottom at 3.250. A break below this boundary exposed the 123.6% Fib expansion at 3.080. The 3.426 level has been recast as near-term resistance.

Daily Chart - Created Using FXCM Marketscope 2.0

Commodities Aim Higher as Risky Assets Find Support, US Data in Focus

Talking Points
Crude Oil, Copper Aim to Follow Stocks Higher as Market Sentiment Recovers Gold and Silver Looking to Balance Cues from Risk Trends, QE3 Expectations Commodity prices are yielding mixed results in European trade as traders wait for guidance from the US economic data set to establish near-term direction cues. May’s US Consumer Confidence reading and the Dallas Fed Manufacturing Activity gauge are on tap, with expectations pointing to improvements on both fronts. Broadly speaking, data collected by Citigroup suggests US economic data has stabilized relative to expectations in May after three months of deterioration. This lays the foundation for stronger outcomes to buoy hopes that a firming (albeit unevenly so) recovery in North America can help offset weakness in Europe and Asia.
In the context of heavy selling across the risky asset space over recent weeks, this may help drive a recovery in sentiment. As noted yesterday, this would fall within the context of a general tendency toward corrective profit-taking on risk-off exposure accumulated over recent weeks. This bodes well for growth-geared crude oil and copper prices and may likewise offer a lift to gold and silver amid ebbing demand for the safe-haven US Dollar. Upside momentum in the precious metals space may be limited however in that firmer data would work against QE3 expectations, denting the appeal; of alternative store-of-value assets. S&P 500 stock index futures are pointing firmly higher ahead of the opening bell no Wall Street, reinforcing the likelihood of a risk-on scenario in the hours ahead.
WTI Crude Oil (NY Close): $90.86 // +0.20 // +0.22%
Prices put in a Harami candlestick pattern above resistance-turned-support at 90.14, the September 7 closing high, hinting a corrective bounce may be ahead. Positive RSI divergence reinforces the case for an upside scenario. Initial resistance lines up at 92.51, a former support marked by the December 16 low, with a push above that targeting 95.41 (another former bottom now acting as resistance at the February 2 low).

Daily Chart - Created Using FXCM Marketscope 2.0
Spot Gold (NY Close): $1580.94 // +7.91 // +0.50%
Prices continue to consolidate above support in the 1522.50-1532.45 area. Near-term trend line support-turned-resistance lines up at 1584.56. A break above this boundary exposes the 1600/oz figure followed by the top of a channel set from late February, now at 1621.73.

Daily Chart - Created Using FXCM Marketscope 2.0
Spot Silver (NY Close): $28.39 // -0.13 // -0.47%
Prices are recovering from support at 27.06 after putting in a Bullish Engulfing candlestick pattern to aim at resistance at 28.70. A break above this level initially exposes 29.71. Alternatively, a reversal through support exposes the 26.05-15 area.

Daily Chart - Created Using FXCM Marketscope 2.0
COMEX E-Mini Copper (NY Close): $3.448 // +0.020 // +0.58%
Prices are mounting a recovery from support at 3.438, the 100%Fibonacci expansion. Positive RSI divergence reinforces the case for an upside scenario. Initial resistance lines up at 3.537, the 76.4% expansion level. Alternatively, a break below support exposes the 123.6% level at 3.327.

Daily Chart - Created Using FXCM Marketscope 2.0

Commodities Rise Despite Dismal Chinese, Eurozone PMIs - Why?

24 May 2012 11:00 GMT Talking Points
Crude Oil, Copper Follow Shares Higher as Risk Appetite Corrects Gold and Silver Find Support on Waning Haven Demand for US Dollar Risk appetite trends appear to be shrugging off softer Chinese and Eurozone PMI figures, with European shares on the upswing and growth-geared crude oil and copper prices following suit. Meanwhile, waning haven demand is pressuring the US Dollar, allowing an upside correction for anti-fiat gold and silver prices. S&P 500 stock index futures have erased earlier losses and now trade firmly in positive territory ahead of the opening bell on Wall Street, reinforcing the likelihood of a recovery across the sentiment landscape as North America comes online.
While the chipper mood is undoubtedly running counter to economic data, recent price action offers context to explain what may be happening. Risky assets have faced unrelenting selling pressure over the past three weeks with very little corrective recovery in the interim. With the EU leaders’ summit in the rearview mirror and growth indicators reinforcing the seriousness of already well-known headwinds facing global output from the Eurozone and China, the supply of near-term negativity that can conceivably strike the markets may be running dry. Broadly speaking, this opens the door for a corrective recovery until the bears find fresh fodder to fuel downward momentum as the second Greek election approaches in mid-June.
The US economic calendar appears broadly supportive of an improving risk appetite profile. Durable Goods Orders are expected to rise in April after a sharp dip in March, the Kansas City Fed manufacturing activity index is forecast to rise in May after two consecutive months of losses, and weekly Jobless Claims numbers are set to yield a modest but broadly positive result. While Initial Claims are expected to hold at 370K for a second week, Continuing Claims are due to edge lower to 3250K.
WTI Crude Oil (NY Close): $89.90 // -1.95 // -2.12%
Prices continue to test resistance-turned-support at 90.49, with a break lower initially exposing the 61.8% Fibonacci retracement level at 88.54. Near-term resistance lines up at 92.51, a former support marked by the December 16 low, with a push above that targeting the February 2 low at 95.41.
Daily Chart - Created Using FXCM Marketscope 2.0
Spot Gold (NY Close): $1561.45 // -7.05 // -0.45%
Prices recoiled from resistance marked by the 1600/oz figure as well as the 50% Fibonacci retracement level at 1599.17, taking out support at 1582.10 marked by the 38.2% level and exposing the next downside objective at 1560.98. A break below this boundary exposes the 1522.50-1532.45 area. The 1582.10 level is acting as resistance.

Daily Chart - Created Using FXCM Marketscope 2.0
Spot Silver (NY Close): $28.18 // -0.29 // -1.00%
Prices are reversing lower from resistance at 28.70, with sellers once again aiming to challenge support at support at 27.06. A break lower exposes the 26.05-15 area. Alternatively, a reversal back through resistance on a daily closing basis targets the next upside barrier at 28.70.
Daily Chart - Created Using FXCM Marketscope 2.0
COMEX E-Mini Copper (NY Close): $3.396 // -0.092 // -2.64%
Prices are testing through support at 3.438, the 100%Fibonacci expansion, with a break below that exposing the 123.6% level at 3.327. Near-term resistance lines up at 3.537, the 76.4% expansion level.
Daily Chart - Created Using FXCM Marketscope 2.0

?? Commodities Tumble Along with Stocks Before EU Leaders Summit

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Currency Strategist 23 May 2012 09:00 GMT Talking Points
Crude Oil, Copper Sink with Stocks Before EU Leaders’ Summit Gold and Silver Down as Safe-Haven Flows Buoy the US Dollar Commodities are sinking in early European hours as risk appetite evaporates ahead of today’s EU leaders’ summit. Traders are pondering an endgame to the latest debt crisis flare-up that may include Greece’s exit from the Eurozone, an unprecedented outcome with no clear-cut benchmark for its implications for the financial markets. Sentiment-driven crude oil and copper prices are following shares lower while gold and silver face de-facto selling pressure as the rout stokes safe-haven inflows into the US Dollar.
The EU sit-down is being billed as an “informal” working dinner. German officials were busy taking to the wires yesterday to pour cold water on expectations for what may emerge at its conclusion. A statement on Greece, the issuance of joint Eurobonds or any specific policy decisions in general are – according to German sources cited across the spectrum of newswires – not to be. That has left traders understandably jittery about what will in fact be accomplished.
If the German public line is taken at face value, the conversation will center on the European Investment Bank (EIB) and how it can be used more effectively to boost growth, presumably without compromising deficit-reduction efforts. If that is indeed the case, disappointed selling seems likely to descend upon the spectrum of risky assets.S&P 500 stock index futures are pointing decidedly lower, hinting current trends have scope to carry forward, though the weighty event risk ahead means things can change very rapidly in the coming hours.
WTI Crude Oil (NY Close): $91.85 // -1.01 // -1.09%
Follow-through failed to materialize after prices completed a Bullish Engulfing candlestick pattern yesterday and took out resistance at 92.51, a former support marked by the December 16 low. Crude has now slipped back below that level, exposing horizontal pivot support at 90.49 once again. Still, the Bullish Engulfing remains valid absent a daily close beneath its low at 90.90, leaving the door open for a rebound. A break back through 92.51 targets the February 2 low at 95.41.

Daily Chart - Created Using FXCM Marketscope 2.0
Spot Gold (NY Close): $1568.50 // -24.57 // -1.54%
Prices recoiled from resistance marked by the 1600/oz figure as well as the 50% Fibonacci retracement level at 1599.17, taking out support at 1582.10 marked by the 38.2% level and exposing the next downside objective at 1560.98. A break below this boundary exposes the 1522.50-1532.45 area. The 1582.10 level is once again acting as resistance.

Daily Chart - Created Using FXCM Marketscope 2.0
Spot Silver (NY Close): $28.18 // -0.29 // -1.00%
Prices are reversing lower from resistance at 28.70, with sellers once again aiming to challenge support at support at 27.06. A break lower exposes the 26.05-15 area. Alternatively, a reversal back through resistance on a daily closing basis targets the next upside barrier at 28.70.
Daily Chart - Created Using FXCM Marketscope 2.0
COMEX E-Mini Copper (NY Close): $3.488 // -0.014 // -0.40%
Prices are testing through support at 3.438, the 100%Fibonacci expansion, with a break below that exposing the 123.6% level at 3.327. Near-term resistance lines up at 3.537, the 76.4% expansion level.
Daily Chart - Created Using FXCM Marketscope 2.0

::: Commodities Sold as Risk Appetite Fades in Europe, US Jobs Data on Tap

Currency Strategist 04 May 2012 08:59 GMT Talking Points
Crude Oil, Copper Sold as Risk Aversion Grips Europe, All Eyes on US Jobs Data Gold and Silver Outlook Clouded Along with That of US Dollar Pre-NFP Result All eyes are on the US Employment report into the week-end. Expectations call for the nonfarm payrolls to rise 160,000 in April after rising 120,000 in the previous month. The release presents a variety of divergent scenarios for the financial markets.
On one hand, a stronger-than-expected result can be interpreted as broadly supportive for risk appetite and drive growth-geared commodities including crude oil and copper higher while weighing on the US Dollar amid waning safe haven demand, an outcome supportive for gold and silver. Alternatively, such an outcome can be viewed as USD-supportive in that it would reduce the probability of a Fed QE3 program, weighing on precious metals and likely hurting risky assets hoping the choppy US recovery will benefit from added help from monetary policy.
Similarly, a disappointing print can be rationalized from both perspectives as well, driving USD higher amid risk aversion or sinking it as stimulus hopes are reinforced. The former seems clearly negative for the spectrum of commodity prices while the latter is supportive. Furthermore, it is not outside the realm of possibility to see precious metals take the QE3-themed route while cycle-sensitive commodities focus on the global growth implications of the result.
With this in mind, a clear bearing is difficult to establish. The markets appear likewise puzzled, with S&P 500 index futures flat before the opening bell on Wall Street, though price action in early European trade reflects risk-averse cues as traders turn defensive and pare exposure ahead of the weekend’s elections in Greece and France. On balance, it seems prudent to treat the jobs report as an opportunity to gauge the context within which to interpret US data going forward rather than a discrete trading opportunity in its own right.
WTI Crude Oil (NY Close): $102.54 // -2.68 // -2.55%
Prices followed a Harami candlestick pattern below resistance at a falling trend line set from late February indentified yesterday with a sharp move lower. Sellers are now upward-slowing support established since mid-December, with a break lower exposing the 50% Fibonacci expansion at 101.60. Near-term resistance lines up at 104.13, the 23.6% Fib.

Daily Chart - Created Using FXCM Marketscope 2.0
Spot Gold (NY Close): $1635.98 // -17.52 // -1.06%
Prices followed a Spinning Top candle below trend line resistance capping gains since late March with a push below support at 1637.95, the 23.6% Fibonacci expansion. Sellers now target the 38.2% Fib at 1611.77. The 1637.95 level has been recast as near-term resistance, followed by the trend line at 1663.54.

Daily Chart - Created Using FXCM Marketscope 2.0
Spot Silver (NY Close): $30.09 // -0.55 // -1.80%
Prices are recoiling from resistance at 31.36, a former support reinforced by a downward-sloping trend line set from the April 3 high. Sellers face initial barriers at 29.96, the April 25 low, followed by the bottom of a falling channel set from early March now at 29.44. Near-term resistance is at 30.99.

Daily Chart - Created Using FXCM Marketscope 2.0
COMEX E-Mini Copper (NY Close): $3.736 // -0.052 // -1.37%
Prices turned lower as expected after putting in a Hammer candlestick below support-turned-resistance at a rising trend line set from mid-February. Initial support lines up at 3.713. Trend line resistance is now at 3.859.

Daily Chart - Created Using FXCM Marketscope 2.0

~~~ Commodities Drop on China Growth Fears, ECB and US Data Key Ahead

Crude Oil, Copper Sold on China Growth Fears – ECB and US Data Set Eyed Ahead Gold and Silver Look to Dollar’s Response to Risk Trends, QE3 Bets for Direction Commodity prices are extending Asia-session losses in early European trade, weighed down by a drop in China’s Non-manufacturing PMI index on fears that one the world’s top-two consumers of raw materials is slowing. Looking ahead, all eyes are on the European Central Bank interest rate decision. Traders are looking for guidance on steps policymakers are prepared to take to alleviate what appears to be deepening recession after yesterday’s sharp slump in final PMI readings and another record-high unemployment print.
An outright rate cut seems unlikely this time around with inflation stubbornly high at 2.6 percent. However, if Mario Draghi and company invoke the ECB’s singular mandate of price stability to justify inaction and fail to reassure markets with the prospect of forthcoming easing in the months ahead, worries about Eurozone-bornheadwinds facing global output threaten to weigh on risk appetite. This bodes ill for cycle-sensitive commodities including crude oil and copper, while gold and silver may follow lower as haven-seeking capital flows boost the US Dollar.
Later in the day, the spotlight turns to US Jobless Claims and the ISM Non-manufacturing Composite figures. These are likely to be interpreted in terms of their implications for the likelihood of Fed QE3, which means softer outcomes could counter-intuitively support risk appetite and weigh on the Dollar (both via sentiment trend and dilution fears) to the benefit of precious metals. With that in mind, significant follow-through on this front may be lackingas traders reserve judgment until after Friday’s all-important Nonfarm Payrolls data point crosses the wires. This means any negative carry-over from the ECB’s outing may have scope to hold sway over price action.
WTI Crude Oil (NY Close): $105.22 // -0.94 // -0.89%
Prices put in a Harami candlestick pattern below resistance at a falling trend line set from late February, hinting a pullback may be ahead. Initial support lines up in the 104.90-105.15 area, marked by a horizontal barrier and the 50% Fibonacci retracement level. A break below here exposes rising trend line support at 102.42. Resistance is now at 106.03 and bolstered by the 61.8% Fib at 106.27.

 Daily Chart - Created Using FXCM Marketscope 2.0
Spot Gold (NY Close): $1653.50 // -8.93 // -0.54%
Prices followed a Spinning Top candle below trend line resistance capping gains since late March with a push lower. Sellers face initial support at 1637.95, the 23.6% Fibonacci expansion, with a break lower exposing the 38.2% level at 1611.77. Trend line resistance is now at 1664.48.

 Daily Chart - Created Using FXCM Marketscope 2.0
Spot Silver (NY Close): $30.64 // -0.34 // -1.08%
Prices are recoiling from resistance at 31.36, a former support reinforced by a downward-sloping trend line set from the April 3 high. Sellers face initial barriers at 29.96, the April 25 low, followed by the bottom of a falling channel set from early March now at 29.50. Near-term resistance is at 31.08.

 Daily Chart - Created Using FXCM Marketscope 2.0
COMEX E-Mini Copper (NY Close): $3.788 // -0.056 // -1.46%
Prices turned lower as expected after putting in a Hammer candlestick below support-turned-resistance at a rising trend line set from mid-February. Initial support lines up at 3.713. Trend line resistance is now at 3.855.

 Daily Chart - Created Using FXCM Marketscope 2.0

!! Commodities Look to US GDP Data to Offset Euro Debt Crisis Jitters

Crude Oil, Copper to Follow Stocks Lower as Eurozone Debt Fears Return Gold and Silver Look to US GDP Report to Keep QE3 Expectations Alive Commodity prices are down in early European trade as risk aversion grips financial markets following a Standard & Poor's downgrade of Spain's credit rating. Sense-linked crude oil and silver prices are following shares lower while gold and silver are facing de-facto selling pressure as the dour mood stokes safe-haven demand for the US Dollar. & S P 500 stock index future are pointing sharply lower, hinting more of the same is on tap as Wall Street comes online.
On the economic data front, all eyes are on the first - quarter US Gross Domestic Product figures, where expectations point to a 2.5 percent annualized quarterly increase after a 3 percent rise in the three months through December.The result is likely to be interpreted in the context of this week's FOMC policy meeting, with a better-than-expected outcome carrying the possibility of reminding traders that Ben Bernanke's commentary was hardly as supportive of QE3 as the markets' initial reaction suggested. Alternatively, a disappointing print will further fuel stimulus bets, which certainly seems supportive for precious metals purpose may also (somewhat counter intuitively) help on the risk appetite front as well.
WTI Crude Oil (NY Close): $104.55 / / + 0.43 / / + 0.41%
Prices are showing a Shooting Star candlestick below resistance at 104.90, a former level support reinforced by the top of a falling channel set from early March. The setup warns of bullish exhaustion and hints a turn lower maybe ahead. Initial rising trend line support is now at 101.98.

Spot Gold (NY Close): $1657.43 / / + 13.80 / / + 0.84%
The top of prices was falling channel set from early March now at 1660.60, with a break higher exposing 1680.35. Support lines up at 1638.02, the 23.6% Fibonacci expansion. Absent a daily close above the channel top, the overall trend remains bearish.

Spot Silver (closed NY): $30.09 / / + 0.38 / / + 1.25%
Prices put in a Hammer candlestick above support at 30.23(1) and rebounded to retest a previously broken barrier at 31.11. A push above this statements falling trend line resistance at 31.70. Alternatively, a reversal through immediate support targets the 30.00 lower figure.

COMEX E-Mini Copper (Close NY): $3.774 / / + 0.066 / / + 1.78%
Prices broke back above 3.713, a former level support recast as resistance, with bulls now aiming to retest the underside of a formerly broken Triangle formation (now at 3.816). The 3.713 level is support once again.