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
To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak
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View the original article here
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
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
View the original article here
Daily Chart - Created Using FXCM Marketscope 2.0 
Daily Chart - Created Using FXCM Marketscope 2.0 
Daily Chart - Created Using FXCM Marketscope 2.0 
very well taken Euro support above 1.3100 all signs point to more risk of trade but no real still follow USD/JPY back under pressure and looking at the EUR/CHF 80.00 test still very interesting cross to watch despite the action prices poor despite a sweep of the fundamental concern which have been weighing on correlated risk assetsoverall, these markets have been strangely well supported. A lot of lower eurozone PMIs, disorders policies for Sarkozy by France, the issues surrounding the status of the AAA rating Dutch and an ever weakening of Spanish debt situation, all contribute to a very unstable perspective euro zone should as a result of the theory to a more significant risk off the coast of the reaction that we have seen. Launch signs of slowdown in China, a weakness in emerging markets, and the latter more soft than expected Auatralian ICC, who sealed the agreement for a rate cut in May and the ability to remain supported markets becomes more confusing still.
TECHNICAL OUTLOOK
EUR/USD: The last series of setbacks are at a standstill before of any multi-week 1.3000 key support and of here still cannot exclude the risk of additional consolidation over 1.3000, before in view of the resumed bearish. Upward closure of last Friday opens the door for additional gains in upcoming sessions, but ultimately, the gatherings to 1.3400 expected well capped. A break and back close daily under 1.3000 is now required to put pressure on the disadvantages and to accelerate downward for 2012 early to 1.2660 depressions.
USD/JPY: The last withdrawal of 2012, senior UST is considered as corrective and it seems that the market has finally found a solid $ 80.00 support. The setbacks are stalled at the top of the daily and weekly Ichimoku clouds and we expect for the formation of a fresh medium term already low somewhere around 80.00, before the next major to the extension back to and possibly through 84.20. Overall, this is a market that underwent a major structural change in the last months and we see the pair in the early stages of a long-term up-trend. Ultimately, only a narrow back under 78.00 weekly deny. Dips to 80.00 should therefore be used as great purchase.
GBP/USD: The recent break back above 1.6000 opens now the door costs upside to the peak of October 2011 at 1.6165. However, additional gains beyond 1.6165 should be difficult to get, and once more see us risks for a bearish reversal for renewed weakness back to support key by 1.5800. A break and closing below 1.5800 will accelerate and decreases. Ultimately, only a weekly closing above 1.6165 would deny underlying bearish bias.
USD/CHF: Our constructive prospects for base remains well intact, with the latest setback very well taken in charge by psychological barriers at 0.9000. It seems now that the market could be looking to carve a bass like fresh and we will monitor for additional upside to upper range recently 0.9335 on the next sessions. Over 0.9335 should accelerate earnings to the heights of 2012 by 0.9600 still in place. Ultimately, only back under 0.9000 delays and gives reason to pause.
