Commodity prices are on the defensive as risk aversion grips financial markets after China’s manufacturing sector shrank for the third consecutive month while the preliminary set of April’s euro-zone PMI figures printed sharply below expectations, rekindling global growth fears. Cycle-sensitive crude oil and copper prices are following shares lower while gold and silver are facing de-facto selling pressure as the risk-averse mood drives haven demand for the US dollar. S&P 500 stock index futures are down over a full percentage point ahead of the opening bell on Wall Street – pointing to more of the same ahead – and an empty economic calendar seemingly assures no major pitfalls to derail momentum.
Comex E-Mini Copper (NY Close): $3.698 // +0.070 // +1.93%
Prices are testing through rising trend line support set from early October, a barrier reinforced by the 50% Fibonacci retracement at 3.606. A break downward exposes the 61.8% level at 3.516. Near-term resistance lines up at 3.696, the 38.2% Fib.
WTI Crude Oil (NY Close): $102.27 // -0.40 // -0.39%
Prices remain wedged between resistance at 104.90 and a rising trend line support set from mid-December, with a Bullish Engulfing candlestick pattern arguing for an upside bias. A break above 104.90 exposes falling trend line barriers at 105.21 and 106.42. Support is now at 101.58.
Prices are testing below support at 1,638.02, the 23.6% Fibonacci expansion, after putting in a Bearish Engulfing candlestick pattern below falling trend line resistance set from early March. A break lower exposes the 38.2% level at 1,612.02. Trend line resistance is now at 1,665.57.
Spot Silver (NY Close): $31.70 // -0.08 // -0.24%
Prices continue to consolidate below resistance at 32.93, the former neckline of a Head and Shoulders (H&S) top carved out between late January and mid-March, and horizontal support at 31.04. A break blower exposes the first downside barrier at 29.79. The H&S setup broadly implies a measured downside target at 26.84.
Daily Chart - Created Using FXCM Marketscope 2.0