Strong economic data from China thrilled the market and the biggest beneficiary was industrial metals. In the near-term, we believe the complex has limited downside as strong potential end-use demand from China together with supply disruption in come mines are going to push prices higher.USD's weakness continued to drive capitals to risky assets such as stocks and commodities. The dollar index plummeted to 14-month low of 74.97 Wednesday before recovering. However, the index stayed at low level of 75.46. Against the euro, USD breached 1.5 and this made the USD's outlook more bearish. Reuters/Jefferies CRB Index gained for the 4th week by rising +1.5% o 280.34.
http://www.oilngold.com/ong-focus/insights/weekly-fundamental-outlook-for-energies-and-metals-macro-environment-continued-to-be-the-major-price-driver-200910259441/
ONG Focus - Technical Written by Oil N' Gold Nymex Crude Oil (CL)
Crude oil's rally extended further to as high as 82.0 last week and met mentioned target of 100% projection of 58.32 to 75 from 65.05 at 81.72. With 4 hours MACD staying below signal line, an intraday top should be in place and some sideway should be seen. Nevertheless, as long as 77.61 minor support holds, consolidation should be relatively brief and a break of 82, will bring rally resumption towards 50% retracement of 147.27 to 33.2 at 90.24. However, note that a break of 77.61 will indicate that a short term top is at least formed and deeper decline should then be seen to 75 resistance turned support first.In the bigger picture, medium term rebound from 33.2, which is treated as a correction to whole decline from 147.27, might still be in progress. But after all, we expect such rebound to conclude inside resistance zone of 76.77/90.24 (38.2% and 50% retracement of 147.27 to 33.2). Hence, focus will remain on loss of momentum and reversal signal even in case of another rise. A break of trend line support (now at 69.14) will be the first signal of topping and further break of 65.05 will confirm and turn outlook bearish.
In the long term picture, there is no change in the view that fall from 147.27 is part of the correction to the five wave sequence from 98 low of 10.65. While there rebound from 33.2 is strong and might continue, there is no solid evidence that suggest fall 147.27 is completed and we're still preferring the case that rebound from 33.2 is merely a corrective rise only. Having said that strong resistance should be seen between 76.77/90.24 fibo resistance zone and bring reversal for another low below 33.2 before completing the whole correction from 147.27.
ONG Focus - Technical Written by Oil N' Gold
Gold's sideway consolidation from 1072 continued last week and is possibly developing into triangle pattern. While deeper retreat cannot be ruled out, we'd continue to expect downside to be contained by 38.2% retracement of 931.3 to 1072 at 1018.3 and bring rally resumption. Break of 1072 high will target 1100 psychological resistance next. However, note that strong break of 1018.3 fibo level will argue dampen this bullish case and argue that deeper fall is in progress for 985.5 support instead.In the bigger picture, the long term up trend in Gold has resumed after taking out 1033.9 resistance firmly. Rise from 681 would likely develop into another set of five wave sequence with first wave completed at 1007.7, second wave triangle consolidation completed at 931.3. Rise from 931.3 is expected to extend to 61.8% projection of 681 to 1007.7 from 931.3 at 1133.2 first and then 100% projection at 1258 next. On the downside, though, break of 985.5 support will dampen this bullish view and will turn focus back to 931.3 support instead.
In the long term picture, as discussed before, rise form 681 is treated as resumption of the long term up trend from 1999 low of 253 after interim consolidation from 1033.9 has completed in form of an expanding triangle. The strong break of 1033.9 resistance affirms this case and should pave the way to 61.8% projection of 253 to 1033.9 from 681 at 1160 and then 100% projection at 1460 level. We'll maintain this bullish view as long as 931.3 support holds.
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