Technical Analyst, Saxo Bank
Summary: Three Exchanged Traded Funds to consider if you as an investor seek an investment in the Agricultural market.
Invesco DB Agriculture Fund DBA. US listed in USD
Wisdom Tree Agriculture ETC London listed in GBP and Paris listed in EUR
As a follow up to the Technical Update on Agriculture products earlier this week the question is of course, where can I as a private investor be invested in this Asset Class? Investing in ETC’s! There are a few listed in US and in Europe
Invesco DB Agriculture Fund DBA. US listed in USD
DBA has reversed its down trend since February and is now back above the Cloud (Shaded area) which is a bullish signal. DBA is also above all Moving Averages. RSI however, is still below 60 threshold i.e., in negative sentiment but is likely to close above shortly.
If DBA closes above resistance here at 20.32 RSI is likely to switch to positive sentiment.
Medium-term DBA is set to reverse the bearish trend. A higher weekly close with the Bullish Engulfing last week is a signal DBA could be building a new uptrend. A weekly close above 20.74 will confirm that with upside potential to previous highs. Expect resistance at around
If DBA closes above 20.74 weekly RSI is also likely to reverse to positive sentiment.
If DBA drops back below the Bullish Engulfing candle i.e., below 19.64 a move down to test key support at around 19.29 is likely.
Wisdom Tree Agriculture ETC London listed in GBP. AIGA
AIGA has been range bound between 6.37 and 7.00 for several months. However, with the forming of a Bullish Engulfing candle this week, which is a bottom and reversal indication, AIGA is set to move higher to test the upper range. A move to test the falling trend line and resistance at around 6.88 could be seen. A close above 6.88 is likely to further fuel a rally higher to the 0.618 and 0.786 retracements at 7.05 and 7.34 respectively.
Weekly RSI illustrates the range bound picture ranging between 40 and 60. But having been below 40 the last RSI is in negative sentiment. A close above 60 is needed to reverse to positive. An AIGA close above 6.88 is likely to be the trigger for that to occur
If AIGA closes below 6.37 Bear trend is to resume with a likely move town to around 6.00. .
Wisdom Tree Agriculture ETC Paris listed in EUR. AIGAP
AIGAP is still a bit depressed but downtrend could be exhausting. On Weekly chart the ETC has formed a Descending Triangle like pattern with support around 5.88. A Descending Triangle can be both a continuation pattern or a reversal. In this case jury’s still out.
However, weekly RSI is showing positive sentiment indicating the support at 5.88 will hold and AIGAP is likely to break out to the upside i.e., break above the upper falling trendline.
A bullish break out and a close above resistance at 6.52 could fuel a really towards 7.00 possibly higher. Target rule by a bullish break out is that the price should come back to minimum the peak in the triangle, in this case around 7.40.
A close below 5.88 could sent the ETC in a tailspin towards support at around 5.00
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.