Technical Analysis for FCPO / FCPO Daily Chart Source: BursaStation Professional
Crude Palm Oil Futures (FCPO) on Bursa Malaysia Derivatives rose and closed above the consolidation range after it broke below the range last week.
While FCPO seemed to be falling further, price managed to rebound back throughout the week due to positive export news from both Intertek Testing Services (ITS) and Societe Generale de Surveillance (SGS).
Cargo surveyor ITS reported that exports of Malaysian palm oil products for July 1 to 31 rose 4.19 percent to 1,406,935 tonnes from 1,350,311 tonnes during June 1 to 30. Meanwhile, SGS reported that exports of Malaysian palm oil products for July 1 to 31 rose 5.31 per cent to 1,385,607 tonnes from 1,315,698 tonnes shipped during June 1 to 30.
On Friday, FCPO traded in a choppy manner and ended flat as investors closed their positions perhaps in preparing for the long holiday next week (Hari Raya) and also to take profit earlier while preparing for the upcoming US non-farm roll job data on Friday which could decide a lot of commodities movement and direction due to its influence towards the Federal Reserve on the issue of monetary easing.
Meanwhile, the US dollar went higher throughout the week as the US economic prospect improved again throughout the week.
The currency went up to as high as 3.2455 against the Malaysian ringgit.
A higher greenback against the ringgit normally makes the palm cheaper for overseas buyers and refiners.
This could be one of the major factors for the rise in exports and could possibly set the tone for the upcoming export reports as CPO price is considered cheap for foreign buyers to purchase especially with the weak ringgit.
The benchmark for FCPO in October contract settled RM2,257 per tonne on Friday which was up 74 points from last Friday at RM2,183.
The trading range for the week was from RM2,284 to RM2,137.
Total volume traded for the week amounted to 186,442 down 3,609 contracts compared with last Friday’s 190,051 contracts.
The open interest as of Thursday decrease 13,763 contracts to 187,446 contracts from 201,209 contracts from previous Thursday.
Technical View
From the chart, price rebounded back above the consolidation range support line after it touched the low of 2,137 for the second time.
Currently, we still maintain our support line which we drew in the chart as our main technical analysis to determine the direction for the FCPO price, for the time being.
Despite the rebound, traders may still need to look into upcoming CPO fundamentals which may bother the price such as the high production cycles and building stock levels.
Should export reports rebound, prices may increase further.
Should prices fail to sustain at the current level, price may revisit the support range line soon.
For the coming week, we pegged our important support levels at 2,200 and 2,180 and 2,137 and 2,100
Meanwhile, for our resistance levels, we pegged important ones at 2,280 and 2,300 and 2,350.
Major fundamental news this coming week
Malaysian Palm Oil Board Data for July on August 12 (Monday)
Malaysian export data for June 1 to 30 by ITS and SGS on Augusts 12 (Monday).
Oriental Pacific Futures (OPF) is a Trading Participant and Clearing Participant of Bursa Malaysia Derivatives. You may reach us at www.opf.com.my Disclaimer: This article is written for general information only. The writers, publishers and OPF will not be held liable for any damage or trading losses that result from the use of this article.