Crude weakens on mixed US economic data


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  • Monday, 29 Jul 2013

MIXED economic data from US has injected more volatility into the market. American new home sales beat expectations and rose to 497,000 in June.

Unemployment claims also gained to 343,000 in the week ended July 20. China unveiled new stimulus measures including government spending cuts, economic reforms, smaller taxes for small businesses and new infrastructure projects. Purchasing Managers’ Index (PMI) manufacturing in June was down to 47.7 for fourth straight month and had little effect in market.

Gold prices rallied to 1,347.85 levels last week but consolidated downward at 1,310.00 regions. Market closed at 1,328.00 regions on Friday.

This week, we reckon gold prices to likely be bearish unless it breaks above 1,350.00 resistances. Breaking below 1,310.00 regions for settlement will initiate new selling pressure and probably carry through lower grounds at 1,270.00 areas. Abandon your short-view if the prices pierce above 1,350.00 regions.

Silver prices hit high of 20.570 regions and slid below the 20.000 level by the end of the week. Technically, we reckon that silver prices to likely consolidate further with neutral bias.

We have identified the resistance at 20.600 regions and clearing above here could climb to 21.000 levels. However, observe the gold trend closely as a potential bear trend in yellow metal might pull silver prices down to 19.200 regions.

WTI Crude prices weakened to 104.00 supports after falling from recent highs at 108.92 levels.

The decline in weekly stockpile is lesser now at minus 2.8 million barrels which has triggered profit-taking from market long traders.

This week, we may see a continuation of the downtrend aiming at 101.00 areas.

However, small consolidation at 106.00 regions is to be expected in the coming early week but trading above 108.00 resistances may prolong the sideways trend.

Crude Palm Oil Futures (FCPO) on Bursa Derivatives broke the 2,200 previous supports and tracked lower to 2,137 last week.

The October delivery month closed at 2,178 on Friday amidst short-covering.

This week, we predict strong selling pressure to ambush at 2,200—2,220 areas, which failing to clear above this region would probably initiate new selling forces after mid-week.

Beware if the demand fails to clear above 2,200 levels as this may further dip to 2,100 bottoms.

>Disclaimer: This article is written for general information only. No liability by the contributors or newspaper.

>Dar Wong and Wahyu PY are the research team of PWFOREX.com. You may reach them through www.pwforex.com.

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