CNH: USD/CNH Capped By 20-day EMA Resistance, But Narrow Ranges Prevail

After a previous large crude inventory build, Bloomberg reported that another 2.5mn barrels were added in the US, according to people familiar with the API data. However, there was a 443k drawdown at Cushing and gasoline stocks fell 3.24mn and distillate 1.4mn suggesting still robust demand. The official EIA data is out later today.

• RES 3: 97.190 - High May 5 2023
• RES 2: 96.932 - 76.4% of Mar-Nov ‘23 bear leg 
• RES 1: 96.860 - High Apr 07
• PRICE: 96.530 @ 16:22 BST May 20
• SUP 1: 95.900 - Low Jan 14  
• SUP 2: 95.760 - Low 14 Nov ‘24
• SUP 3: 95.480 - Low Jan 11 2023 and a major support 

Aussie 3-yr futures rallied off lower levels on the RBA rate cut and guidance, however prices remain south of the 50-dma for now. The recent rally took out resistance at 96.730, the Sep 17 ‘24 high, however momentum faltered, leaving 96.860 resistance intact. A continuation lower would strengthen a bearish theme. This would refocus attention on 95.760, the 14 Nov ‘24 low. A reversal higher would refocus attention on 96.860, the Apr 7 high. 

Overnight the fortnightly GDT auction saw whole milk prices dip to $4332 from $4374 prior. This is a 1% fall. It leaves prices just off multi year highs, see the chart below, where the whole milk auction price is plotted against the Citi terms of trade proxy for NZ. 

• BBG noted: "The GDT price index change, which is a weighted average of the percentage changes in individual milk products between trading events, was a decrease of 0.9%"
• Note later on this morning we get April trade figures for NZ. The trade balance position has improved in recent months, with the March surplus the highest since 2020. 

Fig 1: GDT Whole Milk Powder Prices & Citi NZ Terms of Trade Proxy 

Source: Citi/MNI - Market News/Bloomberg