Brent oil is currently on a bullish trend, facing resistance near $84 and supported by the 200-day EMA. Breaking above this level could lead to a climb towards $90. Short-term support is observed around $80, backed by the 50-day EMA. As summer approaches and travel increases, crude oil tends to benefit from seasonal patterns. Despite temporary setbacks, buying...
Iron ore market dynamics may hurt Aussie
2019-11-11 • Updated
Aussie dropped to 0.7595 in the recent session from the Monday’s opening price of 0.7680. The Reserve Bank of Australia released a neutral statement on Tuesday without even a partly hawkish tilt the market participants waited since the last week central bankers’ meeting.
We expect Aussie to slide even lower as there is a risk of iron ore prices falling lower in the longer term.
Iron ore futures were under pressure during almost three months, then, at the end of the second quarter, they managed to return into bull-market territory mainly on a surge driven by mills in China making additional purchases to replenish stockpiles, with high-quality ore in demand. They almost hit $65 level on June 29 which is the highest price since May 4. According to the Metal Bulletin Ltd., iron ore prices increased more than 20% from this year low of $53.36 posted just a couple of week ago.
Daniel Gardwell, a leading economist at Australia & New Zealand Banking Group Ltd., explained the recent surge as follows: trading activity had increased significantly as buyers returned to the spot market after the long period of sitting on the sidelines.
Nevertheless, in the near term, some banks expect some weakness in iron ore futures given the surging supply. The top producers are expected to boost their exports 3.2% to 301 million tons this quarter, according to the estimates of Sanford C. Bernstein & Co.
Goldman Sachs Group Inc. says the price is heading lower and Citigroup Inc. sees it dropping to the $40s on the back of increased production, rising stockpiles, even if China’s steel production will hold at its current high levels in the upcoming months. Peter O’Connor, an analyst at Shaw & Partners, believes that iron ores prices will slide towards $55 by the end of this year that is iron ores’ marginal cost of production.
Bearish Scenario: Sales below 78.99 with TP1: 77.93, TP2: 77.45, and upon its breakout TP3: 76.56 and TP4: 75.70 Bullish Scenario: Purchases above 78.00 (wait for a pullback to this area) with TP1: 1679.00 (uncovered POC*), TP2: 79.33, and TP3: 79.66 intraday
Bearish Scenario: Sales below 80.00 with TP1: 79.34, TP2: 78.94, TP3: 78.55, and 78.00 Bullish Scenario: Buys above 78.00 (wait for a retracement to the zone) with TP: 79.34 TP2: 80.00, and TP3: 81.00
Bullish Scenario: Buys above 17910 with TP:18098.07, TP2:18277, and TP3: 18415 Bearish Scenario: Sells below 17850 with TP1:17730, TP2: 17700
During his program on CNBC on February 28, Jim Cramer expressed frustration with the impact of earnings reports on market behavior, noting how they often prompt rash decisions by average investors. He criticized the short-term focus and lack of attention to nuance in news coverage of earnings. Cramer cited examples of Home Depot and Lowe's, highlighting how investors reacted hastily to headline news without considering the broader context provided in earnings calls.
After creating record highs, Wall Street's main indexes opened on Wednesday and began to edge lower, reflecting cautious sentiment among investors. They're eagerly awaiting crucial inflation data that could impact the U.S. Federal Reserve's interest rate decisions. The upcoming release of the personal consumption expenditures (PCE) price index is expected...