Daily Commodity Outlook, May 27 2020
<p><span>Asian stocks mostly went higher on Wednesday even when investors digested a report that the Trump administration is considering sanctions on Chinese officials, another sign of deteriorating Sino-American relations. S&P 500 futures also went higher after the gauge made a new high on Tuesday night. The index gave up almost half its gains in the final half-hour of trading with chipmakers exposed to China tumbling. The report suggested that the Treasury Department could impose controls on transactions and freeze assets of Chinese officials and businesses for implementing a new national security law that would curtail the rights and freedoms of Hong Kong citizens. But investors show more optimism upon reopening of economies. </span></p>
<p><span>USD pared losses on Wednesday as the market drew attention back to geopolitical tensions with HK protests going on. China’s proposed legislation could elicit a strong response from the U.S. and a reason to re-examine Hong Kong’s special trade status. With the Hang Seng’s downturn, the gloom seems to be spreading across Asia with major benchmarks paring morning gains.</span></p>
<p><span>Copper prices climbed as much as 2 percent as investors looked past a US-China confrontation over Hong Kong to the prospect of Chinese economic stimulus that would improve metals demand. Meanwhile, bets on lower copper prices on the LME were cut to 9.5 percent of open contracts by Thursday, from 26 percent at the start of April. </span></p>
<p><span>Gold traded sideways as concerns about the U.S. response to China’s proposed security law for Hong Kong countered optimism about a re-opening of the global economy. US President Donald Trump indicated that the US was working on a strong response to China’s planned national security legislation for Hong Kong and it would be announced before the end of the week. Elsewhere, Hong Kong’s legislature was surrounded by riot police, as protests were expected on Wednesday over a bill criminalising disrespect of China’s national anthem and against plans by Beijing to impose national security laws.</span></p>
<p><span>Oil price held below it’s recent high and drifted lower at the open of the Asian trading session. This happened on news that Russia is now planning to start easing supply cuts this July. Further, escalating tensions between the US and China fueled fears of more sanctions being imposed both ways.Further during Memorial day holiday in the US, the demand for american fuel dipped lower, when it was the day that we tend to see peak oil demand across the US. This sends a signal that the global oil rebound is still highly uncertain and may be in for a long ride. CAD however strengthened against the USD. However, this was more due to the USD weakening instead of the CAD strengthening fundamentally.</span></p>
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<p><b>Technical & Trade views</b></p>
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<p><b>USDCAD (</b><b>Intraday bias: bullish above 1.3735)</b></p>
<p><img class="aligncenter size-large wp-image-44244" src="http://blog.tickmill.com/wp-content/uploads/2020/05/usdcad-11-1024×485.png" alt="" width="1024" height="485" srcset="https://blog.tickmill.com/wp-content/uploads/2020/05/usdcad-11-1024×485.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/05/usdcad-11-300×142.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/05/usdcad-11-768×364.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/05/usdcad-11.png 1117w" sizes="(max-width: 1024px) 100vw, 1024px" /></p>
<p><span>We turned bullish as price is approaching our 1st support where the 127% fibonacci extension and horizontal swing low support are.Price is likely to bounce here towards our 1st resistance where the 38.2% fibonacci retracement is. MACD also shows support here.</span></p>
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<p><b>UKOIL (</b><b>Intraday bias: Bearish below 36.66)</b></p>
<p><img class="aligncenter size-large wp-image-44245" src="http://blog.tickmill.com/wp-content/uploads/2020/05/ukoil-11-1024×523.png" alt="" width="1024" height="523" srcset="https://blog.tickmill.com/wp-content/uploads/2020/05/ukoil-11-1024×523.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/05/ukoil-11-300×153.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/05/ukoil-11-768×392.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/05/ukoil-11.png 1107w" sizes="(max-width: 1024px) 100vw, 1024px" /></p>
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<p><span>Oil price drifted sideways and is currently still holding below recent swing high at 36.66. As long as 1st resistance at 36.66 holds, a short term setback towards 1st support at 32.03 can be expected. Further RSI momentum indicator is testing descending resistance where price reacted in the past with room for further downside potential.</span></p>
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<p><b>XAUUSD ( </b><b>Intraday bias: bullish above 1693.744) </b></p>
<p><img class="aligncenter size-large wp-image-44246" src="http://blog.tickmill.com/wp-content/uploads/2020/05/xauusd-11-1024×489.png" alt="" width="1024" height="489" srcset="https://blog.tickmill.com/wp-content/uploads/2020/05/xauusd-11-1024×489.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/05/xauusd-11-300×143.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/05/xauusd-11-768×366.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/05/xauusd-11.png 1115w" sizes="(max-width: 1024px) 100vw, 1024px" /></p>
<p><span>Price is approaching our support, in line with our ascending support line, horizontal swing low support, 78.6% fibonacci retracement and 127.2% fibonacci extension where we could see a bounce above this level to our first resistance level. Stochastic is approaching our support where we could see a bounce above this level as well.</span></p>
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<p><b>XCUUSD ( </b><b>Intraday bias: bullish above 2.36914)</b></p>
<p><img class="aligncenter size-large wp-image-44247" src="http://blog.tickmill.com/wp-content/uploads/2020/05/xcuusd-12-1024×529.png" alt="" width="1024" height="529" srcset="https://blog.tickmill.com/wp-content/uploads/2020/05/xcuusd-12-1024×529.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/05/xcuusd-12-300×155.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/05/xcuusd-12-768×397.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/05/xcuusd-12.png 1109w" sizes="(max-width: 1024px) 100vw, 1024px" /></p>
<p><span>We caught the bounce nicely from our first support level and remained bullish above our support at 2.36914, in line with our horizontal pullback support, ascending support line and 61.8% fibonacci retracement where we could see a bounce to our first resistance level. RSI and Ichimoku cloud are showing signs of bullish pressure in line with our bullish bias.</span></p>
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<p>The post <a rel="nofollow" href="https://blog.tickmill.com/tech-analysis/daily-commodity-outlook-may-27-2020/">Daily Commodity Outlook, May 27 2020</a> appeared first on <a rel="nofollow" href="https://blog.tickmill.com">Tickmill</a>.</p>
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