Oil has been struggling in the past few days, as a sharp increase in new COVID-19 cases in some countries - primarily emerging markets - triggered concerns about the global economic recovery and oil demand. The deteriorating situation could keep Oil prices under pressure in the near-term. Looking at the charts, immediate support can be expected at the 50 % Fibonacci of the April rally at $61.05, as well as the rising trendline from the April 5 low. The key area to watch is $60.00/20 however - with the former being a key psychological support level and the latter the 61.8 % Fibonacci of the April rally. A clear break below this support zone would pave the way for a correction towards $57.80.
This week will likely be volatile for stock markets, as the U.S. earnings season reaches its peak. With many tech giants - including Apple and Alphabet - presenting their latest figures, traders will keep a close eye on the USTECH index. It is currently consolidating within a descending channel, and recently got rejected at 14,000 resistance. The overall trend remains intact, but support 13,710 needs to hold for bulls to keep the upper hand. Should USTECH fail, a correction towards the 13,300/20 support zone appears likely. While tech companies are likely to present strong numbers, already high expectations mean that a continuation of the record-smashing rally is far from sure.
Meanwhile, the GER30 is struggling to find a clear direction and traders prefer to trade the range for now. This appears to be a sensible strategy until the index eithers clear 15,475-15,525 resistance for a continuation of the rally or drops below 15,080 points, which would signal the beginning of a deeper correction. With the broad uptrend still intact, a continued risk-on mode in global markets and the Daily RSI not signaling overbought conditions, the odds of a breakout to the upside are slightly higher.
Coffee is approaching a major resistance level at 140.35. The commodity is unlikely to overcome this hurdle easily, and bulls are already eyeing the 135.50 level to buy the dip. However, with momentum currently strong and the Daily RSI not hinting at overbought conditions yet, Coffee might surprise traders by pushing through this significant resistance level. A clear break above 140.35 would likely trigger further momentum buying and pave the way for the next leg higher.
The recovery rally in Gold continues, but momentum is slowing down. Traders will keep a close eye on the rising trendline from the March low and the $1756/60 support zone for further clues. A break to the downside would be frustrating for Gold bulls, and some might head for the exits again. To the topside, immediate resistance can be expected ahead of the $1800 level, but the next major obstacle for the precious metal will be $1850/56, which is also where the 200 DMA currently lies.
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Weaker than expected NFP print puts USD under renewed pressure; Gold extends gains to hit a recent high as commodities steal the show; GER30 stages recovery