Technical Analysis for FCPO / Technical Analysis for FCPO
Crude Palm Oil Futures (FCPO) rose for the week during the starting of September as weak ringgit spurred more buyer interest.
Palm oil ended the week 1.7 per cent higher which was its fourth straight weekly gain, as a weaker ringgit outweighed a report from the US Department of Agriculture which showed that the dry weather’s damage on US’ soy crop was not worse than
expected.
For the first 31 days of August, cargo surveyor Intertek Testing Service (ITS) reported export had increased 7.45 per cent to 1,511,755 tonnes compare with previous first 31 days of July 2013 at 1,406,935 tonnes.
Société Générale de Surveillance (SGS) reported export increased 7.57 per cent to 1,490,557 compare with first 31 days of July 2013 at 1,385,607
tonnes.
Initially, US dollar retraced to as low as 3.2585. However, the spot rate rebounded on Thursday and Friday to
as high as 3.3300 after data showed the country’s July trade surplus
missed the market’s expectations while US dollar went up strongly after US service sector report showed strong performance in the sector and a solid private jobs
figure.
The weakening ringgit could also be the reason why palm rebounded while investors were waiting for FCPO major fundamental news from the MPOB report this coming Tuesday after market closed for the morning
session.
The new benchmark FCPO November contract settled at RM2,444 per tonne on Friday which was up 40 points from last Friday at
RM2,404.
The trading range for the week was from RM2,385 to RM2,461. Total volume traded for the week amounted to 129,735 contracts down 82,147 contracts compare with last Friday’s 211,882 contracts.
The open interest as of Thursday totalled to 161,702 contracts from 167,561 contracts from the previous Thursday, a decrease of 5,859 contracts.
Technical View
From the chart, we can see that FCPO price did touch the support line (blue) which we drew in the chart before it rebounded and closed higher for the
week.
We will still maintain our view where should the market maintain its uptrend for the time being, it should be above the blue support
line.
Any violation below that line, market may revisit the consolidation range support line (black).
For the coming week we pegged our important support levels at 2,400, 2,385, 2,360 and 2,300.
Meanwhile, for our resistance levels, we pegged important ones at 2,485, 2,500 and 2,550.
Major fundamental news this coming week
MPOB Supply/Demand Fundamental Report –September 10, 2013.
ITS & SGS Export reports –September 10, 2013.
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.