Early last week, US Fed chairman Bernanke said more accommodative policies may be needed to sustain the recovery as rising job data and manufacturing could be short-lived. Dollar weakened and commodities firmed up as investors interpreted as further Quantitative Easing in the pipeline. However, the market bulls stalled very soon from mid week onwards and did not follow through the spikes.
WTI Crude fell off the week’s high 107.74 unexpectedly and closed at 102.90 on Friday. Technically speaking, the previous support at 104 had turned into resistance benchmarks now while we target the trend to decline further this week. The market might aim at 100 benchmark again while bargain hunting would arise from this region. Abandon your short-view if the trend violated above 104 levels.
Gold prices traded inside the consolidating range from 1,644 to 1,697 as we forecasted last week. The market still read as bullish so long as it stayed above 1,650 supports. This week, we maintain our view of firm sentiment of escalating higher to 1,710 regions if it could be supported by strong fundamental news. Abandon your long-view and turn short if the market settled beneath 1,650 levels.
Crude Palm Oil Futures (FCPO) on Bursa Derivatives closed higher on weekly basics and hitting one year record high at RM3,497 per tonne.
The bullish sentiment was due to increasing exports while profit-taking on Friday turned down the market. June delivery month closed at 3,433 with an overall turnover above 25,000 contracts.
This week, we foresee support emerging at 3,100 to 3,120 regions while the bulls might aim to cross above 3,500 targets again.