Commodity prices are under pressure in European trade as global slowdown fears stoke risk aversion across financial markets in the wake of disappointing economic news-flow over the past 24 hours. The ISM Manufacturing gauge unexpectedly showed factory-sector activity shrank again in August, the composite Eurozone PMI gauge was revised lower and overnight reports from China and Australia struck a dour note.
The US calendar is relatively quiet, with traders left to look to the rhetoric accompanying a rate decision from the Bank of Canada for guidance on North American growth trends. S&P 500 stock index futures are pointing firmly lower, suggesting the risk-off mood is likely to carry forward. This stands to weigh on cycle-sensitive crude oil and copper prices while gold and silver face de-facto selling pressure courtesy of returning haven demand for the US Dollar.
Comex E-Mini Copper (NY Close): $3.470 // +0.012 // +0.35%
Prices are pulling back to support at 3.438, with a break below that exposing the bottom of a rising channel set from the Aug. 2 low (3.420). Near-term resistance lines up at 3.535. A push above that targets the channel top at 3.555.
WTI Crude Oil (NY Close): $95.30 // -1.17 // -1.21%
Prices are testing below support at the bottom of a rising channel set from the June 28 low (95.72). Initial resistance is at 97.82, the 61.8% Fibonacci retracement, with a break higher exposing the 100.00 figure and 100.65. Alternatively, a reversal through channel support initially targeting the 50% Fib at 93.90.