#forexbreakfast focus commodity (eng)
A negative week for the Bloomberg commodity index, which lost 1.7%. The strong weakness of the energy sector -5.9% weighed on the performance of the past week. Brent closed with -6.8%. Black gold was subject to strong profit-taking causing the worst decline since October. Some causes were responsible for the profit-taking. From the technical reasons to the physical ones of the European, Asian and African markets. Only on Friday, there was a rebound in prices due to yet another attack on Saudi infrastructure. A bad week also for TTF gas -6.4% – The week was almost neutral for the agricultural sector which closed with -0.4%. Coffee, cocoa, and cotton fell by more than 3%; while corn gained over 3%. Good week for the industrial sector up by 1.5%. Aluminum + 4.4% at the highest since October 2018. Iron fell 3.6% on fears of a decline in demand in China by 2021. Good week for the precious metals sector, up 1.3%. Despite the rise in US rates, gold closed higher for the second consecutive week. Palladium + 11.5% in the wake of the cut in production by Norilsk Nickel responsible for 40% of global output.
Last week the numerous profit-taking pushed Brent prices lower, falling below the bullish trendline that started last November. With Friday’s rebound, Brent closed above the 63.33 support. Should the prices close below this threshold this week, the way would open for areas 60 and 58.98. The weekly stochastic still shows a strong overbought, even if it is starting to show signs of normalization.
Compared to the US rate hike, gold is holding up better than expected. Quotations remain above 1700. For a sign of strength, quotations should close above 1748. Otherwise, the rise of the last two weeks would appear as a technical rebound. 1666 minimum area from April 2020 to be monitored. Only a break of it could lead to further descents.
Laterality week for copper that has fluctuated around 9000 area. The supports at 8674 and 8300 should be monitored. On the upside, the first resistance to monitor is that at 9325 and the subsequent one at 9428.
At the highest level since 2018, the aluminum price is close to the resistance at 2270. The indicators, however, signal a possible pause in the bullish movement. On the downside, there are two supports to monitor, 2122 and 2046.