Metals under pressure but finding technical support. Copper set for bounce

Metals under pressure but finding technical support. Copper set for bounce

Commodity 7 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Gold XAUUSD broke above the strong resistance at around $/oz 1.834 with ease but ran out of steam before reaching next strong resistance at around $/oz 1.910. $/oz 1.875 sellers took control hammering the precious metal down $ 100 in three days.
Is seems finding some support here around the 55 and 200 SMA’s and the short term rising trend line?

Source: Saxo Group

Silver XAGUSD only had a few days above $/oz 25 testing the 200 Simple Moving Average. Similar to Gold Silver got hit by heavy selling and is now testing support at around $/oz 23.15, neckline of the S-H-S pattern. A close below could spur another sell-off down to around 21.45 i.e. bottom of the inverted head.

Source: Saxo Group

Platinum reached it potential price target after the Inverted Shoulder-Head-Shoulder pattern confirmation. Mood changed quickly though after being rejected at the 200 SMA a heavy selling hit the precious metal. Straight through minor support at around $/oz 1000. Some support at around the falling neckline of the S-H-S pattern which currently coincide with $950. However, with RSI now recorded a close below 40 threshold i.e. in bearish sentiment there is great risk of Platinum to test strong support at around $/oz 900.

Source: Saxo Group

Palladium could be range bound between $/oz 1.827 and 2.205 likely testing the lower support within a few days. No clear direction before breaking out of the fairly wide range. If Palladium breaks its support there isn’t any real support before at around $1.732.

Source: Saxo Bank

Copper. After being rejected at the strong resistance at around $/lbs 482.50 Copper experienced a sell-off down to test the falling trend line in the triangle pattern it broke out of. The Commodity has tested it a few times sellers trying to push it back below the trend line, unsuccessful it might seem.

If it closes above $450 we are likely to see a new retest of the resistance level.
If Bears can push it back down below the trend line and close below $ 420 it could trigger a sell-off towards $ 400.

RSI is still bullish and with no divergence indicating the likely scenario is a bullish one.

Source: Saxo bank

After the bubble implosion and total collapse in the Iron Ore price it seems to have found solid ground around $90. On the weekly chart we can see the metal is essentially back to upper level in the “range bound base” it was trading in before market participants entered a buying frenzy last year.

The past two weeks of trading indicates sellers have run out of power and a minor bounce towards the 200 weekly SMA at around $107 is not unlikely. A close above could extend the bounce to $125-130.

Source: Saxo Bank

RSI Divergence explained: When an indicator such as RSI is displaying lower peaks while the underlying price is still making new highs. It is a sign of imbalance in the market, the strength of the trend is weakening. It could be an indicating of an ending of a trend. However, imbalances in financial markets can go on for quite some time. To cancel Divergence out RSI must either 1. Make a new high simultaneously with the price or 2. Close below 40 threshold. 
Same can be observed in bear market just here market makes a new low but Indicator doesn’t.

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-hk/legal/disclaimer/saxo-disclaimer)

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo Capital Markets HK Limited holds a Type 1 Regulated Activity (Dealing in securities); Type 2 Regulated Activity (Dealing in Futures Contract) and Type 3 Regulated Activity (Leveraged foreign exchange trading) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong

By clicking on certain links on this site, you are aware and agree to leave the website of Saxo Capital Markets, proceed on to the linked site managed by Saxo Group and where you will be subject to the terms of that linked site.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

Please note that the information on this site and any product and services we offer are not targeted at investors residing in the United States and Japan, and are not intended for distribution to, or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. Please click here to view our full disclaimer.