COMMODITIES: WTI Crude Bull Cycle Extends, Gold Bear Threat Remains
Jan-03 19:13
- Crude has shrugged off earlier losses to head for its highest close since mid October, rising almost 5% on the week.
- The US crude stock draw helped offset weaker Chinese economic data. A push above the 100-day moving average earlier in the week also spurred bullish sentiment.
- WTI Feb 25 is up 1.2% today at $74.0/bbl.
- China data disappointed this week, with the Caixin manufacturing PMI falling to a lower-than-expected 50.5 in December.
- For WTI futures, the stronger reversal to the upside this week has exposed key short-term resistance at $76.41, the Oct 8 high.
- Meanwhile, spot gold has declined by 0.6% on Friday to $2,643/oz, leaving the yellow metal 0.8% higher on the week.
- Despite this week’s recovery, a bear threat in gold remains present. The first firm support to watch is $2,583.6, the Dec 19 low.
- On the upside, a continuation higher would instead signal scope for a climb towards resistance at $2,726.2, the Dec 12 high.
- In contrast, copper has risen by 1.1% to $407/lb, leaving the red metal 1.2% lower on the week, following the sell-off at the start of the week.
- That earlier sell-off brought copper briefly below support at $401.35, the Aug 7 low and a bear trigger. A clear break of this support would open $388.86 - 1.382 projection of the Sep 30 - Oct 17 - Nov 5 swing.
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US TSYS: Tsys Trim Gains As Chairman Powell Continues
Dec-04 19:07
- Treasury futures scale back from recent highs as Fed Chairman Powell moderated discussion continues.
- The Mar'25 10Y futures slip to 111-03.5 (+4.5) from 111-07 after Chairman Powell touched upon the current strength of the economy and current market projections of rate cuts -- adding the Fed can be cautious in adjusting rates.
- Curves turn mixed: 2s10s +1.890 at 6.189, 5s30s -.437 at 28.290.
- The Fed Beige Book has also been released, showing prices have risen at a modest pace across Fed districts.
EURGBP TECHS: Support Remains Intact For Now
Dec-04 19:00
- RES 4: 0.8464 High Sep 11 and a key resistance
- RES 3: 0.8448 High Oct 31 and reversal trigger
- RES 2: 0.8404 76.4% retracement of the Oct 31 - Nov 11 bear leg
- RES 1: 0.8350/76 50-day EMA / High Nov 19
- PRICE: 0.8283 @ 17:03 GMT Dec 4
- SUP 1: 0.8260 Low Nov 11 and the bear trigger
- SUP 2: 0.8250 Low Apr 14 ‘22
- SUP 3: 0.8203 Low Mar 7 2022 and a major support
- SUP 4: 0.8200 Round number support
EURGBP is trading below its recent highs. Attention is on a bullish engulfing candle pattern on Nov 12, that highlights a possible short-term reversal. 0.8260, the Nov 11 low, marks a key short-term support. The 20- and 50 day EMAs have been pierced. A clear break of both averages would strengthen the risk of a reversal and open 0.8404, a Fibonacci retracement. On the downside, clearance of 0.8260 would resume the downtrend.
LOOK AHEAD: Thursday Data Calendar: Weekly Claims, Trade Balance, Fed Barkin
Dec-04 18:50
- US Data/Speaker Calendar (prior, estimate)
- Dec-5 0730 Challenger Job Cuts YoY (50.9%, --)
- Dec-5 0830 Initial Jobless Claims (213k, 215k)
- Dec-5 0830 Continuing Claims (1.907M, 1.904M)
- Dec-5 0830 Trade Balance (-$84.4B, -$75.0B)
- Dec-5 1130 US Tsy $85B 4W, $80B 8W bill auctions
- Dec-5 1215 Richmond Fed Barkin economic outlook event (no text or media Q&A)
