Content
Weekly Technical Levels
Strategy/Recommendations
MCXSX/NSE USDINR JUNE (CMP – 59.2575)
MCXSX/NSE USDINR June as seen in the weekly chart above has opened the week at 58.4375 levels and as expected prices touched the weekly high level of 59.71 levels. In the end of the week prices corrected from the higher levels and closed below the previous week’s closing of 59.3150 levels and finally closed 0.10% lower at 59.2575 levels. As per the candlestick pattern prices has formed “Doji candlestick pattern” which is the sign of indecisive trend.
For this week we expect USDINR prices to find support in the range of 59.00 – 58.90 levels. Trading consistently below 58.90 levels would lead towards the strong support at 58.60 levels and then finally towards the major support at 58.20 levels.
Resistance is now observed in the range of 59.60 levels. Trading consistently above 59.60 levels would lead towards the strong resistance at 60.00 levels, and then finally towards the major resistance at 60.40 levels.
MCXSX / NSE USDINR Trading levels for the week
Trend: Sideways
S1 – 58.90 R1 – 59.60
S2 – 58.60 R2 – 59.90
Weekly Recommendation: Sell MCXSX/NSE USDINR June between 59.70 – 59.80, SL- 60.40, Target – 59.00 / 58.80 OR Buy MCXSX/NSE USDINR June between 59.00 - 58.80 SL 58.00, Target 59.70 / 59.80
MCX GOLD AUGUST (CMP – 25,863 / $ 1,253.10)
MCX Gold August as seen in the weekly chart above has opened the week at 25,834 levels and made a low of 25,680 levels. During this week prices bounced from lower levels towards the high of 25,999 levels. As expected at the end of the week price could not able to sustain on higher level and corrected towards 25,755 levels and finally closed 0.07% lower at 25,863 levels. As per the candlestick pattern prices has formed “Doji candlestick pattern” which is the sign of indecisive trend.
For this week we expect gold prices to find support in the range of 25,500 – 25,400 levels. Trading consistently below 25,400 levels would lead towards the strong support at 25,000 levels and then finally towards the major support at 24,500 levels.
Resistance is now observed in the range of 26,000 – 26,100 levels. Trading consistently above 26,100 levels would lead towards the strong resistance at 26,400 levels, and then finally towards the major resistance at 26,900 levels.
MCX / Spot Gold Trading levels for the week
Trend: Down
S1 – 25,400 / $ 1,228 R1 - 26,100 / $ 1,265
S2 - 25,000 / $ 1,205 R2 - 26,400 / $ 1,280
Weekly Recommendation:
Gold
Weekly Price Performance
• For continuous sixth week in a row spot gold prices have been trading lower and
hovering around $1250 mark
• Prices were pressurized on as equities in the US hits record highs reducing bullion safe
haven appeal coupled with the a huge decline in investor interest in the futures
market.
• The economic data released from US also paints a bright picture as new factory orders
gain for third straight month in a row
• On the other hand, the ECB lowered the deposit rate to -0.1 percent, meaning it will
effectively charge banks for holding their money overnight.
• It cut its main refinancing rate to 0.15 percent, and the marginal lending rate or
emergency borrowing rate - to 0.40 percent.
• ECB’s rate cut stoked investors appetite for equities and exerted downside pressure
on bullion prices
• In the International markets, gold prices gained marginally by 0.21 percent in the last
week. Gold prices touched a weekly low of $1240.61/oz before closing at
$125.2.23/oz on Friday.
• In the Indian markets, gold prices declined by 1.78 percent in the last week taking
cues from weak international markets. Gold prices touched a weekly low of
Rs.25755/10 gms before closing at Rs.25863/10 gms on Friday.
SPDR Gold Holdings
• Last week, holdings in the SPDR Gold Trust gained by 1.8 tonnes to 787.08 tonnes.
• On a year-to-date basis, holdings have declined by 11.14 tonnes, or 1.40 percent.
The European Central Bank cut interest rates to record lows
•The European Central Bank cut interest rates to record lows on Thursday, launched a series of measures to pump money into the sluggish euro zone economy, and pledged to do more if needed to fight off the risk of Japan-like deflation.
•For the first time, the ECB will charge banks for parking funds at the central bank overnight in an attempt to force them to lend to small- and medium-sized businesses. CFTC holdings:
•The Commodity Futures Trading Commission (CFTC) Commitments of Traders report in the week to June 3 showed that the bullion investors have cut their net longs positions by 17329 contracts to 51064 contract, down by 25.3%. Outlook
•From a week’s point of view, we expect gold prices to trade lower as major fundamentals suggest lack of appetite for gold as a safe haven.
•Lack of investment demand and soft physical demand coupled with rising equities in the US also indicates losing interest in the precious metal.
•Optimism in the US economy continues to build with host of economic data sets indicating momentum in the economy will pressurize prices.
•Meanwhile, speculators have cut their bullish bets on gold indicating that gold waning interest as a safe haven acting as a negative factor.
•In the Indian markets, gold prices are expected to trade lower taking cues from weakness in international markets and gold prices can possibly head towards Rs.25200 mark. Weekly Technical Levels – Trend Down
•Spot Gold : Support $1228/$1205 Resistance $1265/$1280. (CMP: $1254.70)
MCX SILVER JULY (CMP – 39,997 / $ 19.00)
MCX Silver July as seen in the weekly chart above has opened at 39,657 levels and made a low of 39,465 levels. During this week prices bounced from the lower levels towards the weekly high of 40,470 levels. As expected at the end of the week prices could not able to sustain on the higher levels and corrected towards 39,828 levels and finally closed 1.04% higher at 39,997 levels. Technically, Prices has formed a “Small Bullish candlestick pattern” which is basically sign of short covering on the lower levels.
For this week we expect silver prices to find support in the range of 39,200 – 39,000 levels. Trading consistently below 39,000 levels would lead towards the strong support at 38,500 levels and then finally towards the major support at 38,100 levels.
Resistance is now observed in the range of 40,400 – 40,500 levels. Trading consistently above 40,500 levels would lead towards the strong resistance at 41,300 levels, and then finally towards the major resistance at 41,900 levels.
MCX / Spot Silver Trading levels for the week
Trend: Down
S1 – 39,200 / $ 18.70 R1 - 40,500 / $ 19.30
S2 - 38,500 / $ 18.30 R2 - 41,300 / $ 19.80
Weekly Price Performance
• Gold prices traded on a lower side during last week, while silver prices rose by more than 1.5
percent and closed at $19/oz. Strength in the base metals complex and flat dollar index led
to price rise in the international markets. In the international markets, the white metal rose
by 1.71 percent, touched a weekly high of $19.18/oz, and closed the week at $18.97/oz.
• On the MCX, silver prices rose by 1 percent and closed at Rs.39997/kg in line with strength in
international markets. Silver prices made a weekly high of Rs.40470/kg
CFTC Holdings
• The Commodity Futures Trading Commission (CFTC) Commitments of Traders report in the
week to May 20 showed that hedge funds and money managers have raised their net short
positions by 3605 contracts to 10602 contracts.
Silver market players are in favor of an electronic, auction-based system for setting a benchmark
price
• Silver market players are in favor of an electronic, auction-based system for setting a
benchmark price with a broader base of contributors when the 'fix' ceases in August, the
London Bullion Market Association (LBMA) said on Thursday.
• The LBMA has been consulting market participants on a potential replacement for the daily
silver 'fix' since its operator said in May it would stop administering the 117-year-old
process.
Outlook
• Spot silver prices are expected to trade on a weak note taking cues from weakness in gold
prices. Waning interest in the grey metal, economic optimism in the US are all hinting
towards winding up of QE and the speculative activity in the silver will reduce leading to
price falling further in the coming weeks. Meanwhile, CFTC positions in the recent weeks
indicate net shorts have increased acting as a negative factor
• In the Indian markets, silver prices on the MCX is expected to lower and prices can possibly
head towards Rs.39200 mark
Weekly Technical Levels – Trend Down
• Spot Silver: Support $18.7/$18.30 Resistance $19.30/$19.8. (CMP: $19.08)
• Strategy: Support Rs.39200/38500, Resistance Rs.40500/41300. (CMP: Rs.40150)
MCX COPPER JUNE (CMP – 398.80 / $ 6,771)
MCX Copper June as seen in the weekly chart above has opened at 411.70 levels and as expected during this week prices made a high of 416.85 levels. We observed that prices could not able to sustain on higher levels and corrected back towards the weekly low of 396.30 levels. During this week prices have breached multi week’s lows and trading below it and finally closed 2.92% lower at 398.80 levels. Broadly from last couple of weeks prices have been trading between the support and resistance levels and this week prices have breached the support of 404 levels following with a “Big Bearish candlestick pattern” which is indication of bearish trend.
For this week we expect Copper prices to find support in the range of 392 – 390 levels. Trading consistently below 390 levels would lead towards the strong support at 384 levels and then finally towards the major support at 378 levels.
Resistance is now observed in the range of 403 - 404 levels. Trading consistently above 404 levels would lead towards the strong resistance at 409 levels, and then finally towards the major resistance at 414 levels.
MCX / LME Copper Trading levels for the week
Trend: Down
S1 – 390 / $ 6,700 R1 – 403 / $ 6,950
S2 – 384 / $ 6,600 R2 – 409 / $ 7,060
Weekly Recommendation:
Weekly Price Performance
• LME Copper prices plunged by 2 percent last week owing to probe into financing transactions
at China’s Qingdao Port that has led to concerns of falling demand in deals using the metal as
collateral. Also, rate cut by the ECB in its monetary policy meeting exerted downside pressure
on prices. Further, mixed economic data from the US and Euro Zone pushed the prices lower.
• However, positive manufacturing data from the biggest consumers, the US and China along
with 2 percent decline in inventories cushioned sharp downside in prices. The red metal
touched a weekly low of $6640/tonne and closed at $6709/tonne on Friday.
• MCX Copper prices declined by around 3 percent owing to Rupee appreciation and touched an
intra-day low of Rs.396.3/kg before closing at Rs.398.8/kg in the last trading session.
Copper Inventories
• On the LME, copper inventories plunged by around 2 percent to 167,775 tonnes in the last
week as against a closing of 171,350 tonnes in the prior week.
CFTC holdings:
• The Commodity Futures Trading Commission (CFTC) Commitments of Traders report in the
week to May 27 showed that speculators reduced net long wagers in copper to 16,240
contracts compared to net longs of 21315 in the preceding week.
Outlook
• We expect LME Copper prices to trade sideways taking cues positive economic data from the
US and China which will support an upside in prices. Also, weakness in the DX along with
favorable data from Euro Zone will support gains.
• While on the other hand, mixed global market sentiments will cap sharp gains or even reversal
in prices.
• In the Indian markets, Rupee movement will provide further direction to prices.
Weekly Technical Levels
• LME Copper: Support $6700/$6600 Resistance $6950/$7060. (CMP: $6655)
MCX CRUDE JUNE (CMP – 6,057 / $ 102.79)
MCX Crude oil June as seen in the weekly chart above has opened the week at 6,115 levels and during this week price made a high of 6,159 levels. During this week as expected prices could not able to sustain on higher levels and corrected back towards the weekly low of 6,013 levels. During this week price have closed below the previous week’s closing of 6,106 levels and finally closed 0.80% lower at 6,057 levels. As per the candlestick pattern it formed a “Bearish Candlestick Pattern” which represents the bearish trend for coming trading session.
For this week we expect Crude oil prices to find support in the range of 6,010 – 6,000 levels. Trading consistently below 6,000 levels would lead towards the strong support at 5,950 levels.
Resistance is now observed in the range of 6,120-6,130 levels. Trading consistently above 6,130 levels would lead the rally towards the strong resistance at 6,190 levels, and then finally towards the major resistance at 6,250 levels.
MCX / NYMEX Crude Oil Trading levels for the week
Trend: Down
S1 – 6,000 / $ 101.70 R1 – 6,130 / $ 104.00
S2 – 5,950 / $ 100.70 R2 – 6,190/ $ 105.00
Weekly Recommendation:
Weekly Price Performance
• Strength in the dollar index and rising OPEC production lead to fall in both brent and WTI oil
prices in the last week
• Prices traded lower on ample supply in the US and ease of tensions in Ukraine.
• Ukraine's President-elect and western leaders are working on a peace plan to end violence in
the east of the country.
• Although the inventories report released last week showed a drawdown, the stocks remain
near the top of the typical range for this time of year.
• WTI Crude oil prices declined by 0.22 percent touched a weekly low of $101.6/bbl and closed at
$102.48/bbl.
• On the domestic bourses, prices declined by 0.74 percent due taking cues from international
market. Crude prices closed at Rs.6061/bbl on Friday after touching a weekly low of
Rs.6057/bbl.
Oil Inventories
• The API released its weekly inventories report last week and US crude oil inventories fell by 1.4
million barrels to 382.5 million for the week ending on 30th May 2014.
• Gasoline stocks rose by 0.8 million barrels whereas distillate inventories fell by 0.3 million
barrels for the same time period.
• The EIA released its weekly inventories report last night week and US crude oil inventories fell
by 3.4 million barrels for the week ending on 30th May 2014.
• Gasoline stocks rose by 0.21 million barrels whereas distillate inventories rose by 2 million
barrels for the same time period.
CFTC Holdings:
•The Commodity Futures Trading Commission (CFTC) Commitments of Traders report in the week to May 27th showed that bullish bets on crude oil declined by 10893 contracts to 382260 contracts down by around 2.77 percent.
Libya's crude exports could fall to zero in days
•Libya's crude exports could fall to zero in days as the state oil company could be forced to divert the only remaining exports to the Zawiya refinery, which provides crucial gasoline to the country's capital.
•Crude from two offshore fields may be used to supply the 120,000 barrel per day refinery unless oil production from Brega in the east improves within two days, a spokesman for National Oil Corp (NOC) said.
Iran crude oil exports increased in May
•Canada almost doubled imports of crude oil from the United States in April compared with the same month a year earlier, Statistics Canada data showed on Wednesday, as the U.S. light oil boom continued to displace barrels from overseas.
•Crude exports are restricted in the United States under decades-old legislation, but companies are allowed to apply for licenses to sell oil to Canada.
•A bill introduced by U.S. Senator Edward Markey on Thursday aims to ease Ukraine's fuel dependence on Russia by modernizing its heating infrastructure and updating its Soviet-era natural gas drilling capabilities.
•Some U.S. lawmakers have called for a surge in U.S. fuel exports to help Ukraine wean itself from Russian energy supplies after President Vladimir Putin's invasion and annexation of the Crimean peninsula.
•Thomson Reuters Oil Research and Forecasts expects to close May assessment for crude arrivals into China at around 22-23 million metric tonnes (mt) which would be the lowest since October 2013 which stood at 20.42 million mt.
Outlook
•From a week’s perspective, we expect crude oil prices to trade lower on ease of tensions in the Ukrainian peninsula.
•Crude inventories in the US are high at this time of the year acting as a negative factor.
•On the other hand, driving season in the US will create incremental demand for gasoline resulting in draining of inventories.
•Meanwhile, money managers have cut their bullish bets on crude after raising their bets for continuous three week in a row will pressurize prices.
•In the Indian markets, prices are expected to trade lower taking cues from weakness in international markets and possibly head towards Rs.6050 mark.
Weekly Technical Levels
•Nymex Crude: Support $101.70/100.70 Resistance $104/$105 (CMP: $103.04)
MCX NATURAL GAS JUNE (CMP – 279 / $ 4.715)
MCX Natural Gas June as seen in the weekly chart above has opened the week at 271.90 levels and it made a low of 268.60 levels. As expected prices could not able to sustain on lower levels and bounced back towards the weekly high of 280.40 levels. At the same time price have breached preceding three week’s high and trading above it and formed a “Bullish candlestick pattern” which is the sign of optimism. Finally prices have closed 2.88% higher at 279 levels.
For this week we expect Natural Gas prices to find support in the range of 273 - 272 levels. Trading consistently below 272 levels would lead towards the strong support at 264 levels.
Resistance is now observed in the range of 285 - 288 levels. Trading consistently above 288 levels would lead towards the strong resistance at 295 levels, and then finally towards the major resistance at 305 levels.
MCX / NYMEX Natural Gas Trading levels for the week
Trend: Up
S1 - 272 / $ 4.50 R1 - 288 / $ 4.90
S2 - 264 / $ 4.30 R2 - 295 / $ 5.10
Weekly Recommendation:
Rupee
Weekly Price Performance
•The Indian Rupee traded on a flat note last week and appreciated on the back of inflow of foreign funds into debt and equity markets and optimistic domestic market sentiments.
•Further, Reserve Bank of India (RBI) allowed foreign investors to participate in foreign exchange and derivatives trading in Indian Rupee in its monetary policy meeting on Tuesday supported an upside in the currency.
•However, sharp upside in the currency was capped owing to central bank buying dollars to increase its forex reserves. Further, dollar demand from oil and other importers restricted positive movement in the currency. The Indian Rupee touched a weekly high of 58.92 and closed at 59.17-level on Friday.
RBI maintains status quo as widely expected
•The RBI (Reserve Bank of India) in its second Bi-Monthly Monetary Policy review on 3rd June 2014 maintained its status quo by keeping the Cash Reserve Ratio (CRR), repo and reverse repo rate unchanged at 4 percent, 8 percent and 7 percent respectively.
•RBI reduced the Statutory Liquidity Ratio (SLR) for scheduled commercial banks by 50 basis points (bps) from 23 percent to 22.5 percent of Net Demand and Time Liability (NDTL) with effect from the fortnight beginning on 14th June 2014. Further, central bank reduced the liquidity provided under the Export Credit Refinance (ECR) from 50 percent to 32 percent of eligible export credit outstanding with immediate effect.
Outlook
•We expect Indian Rupee to trade on a mixed note in the coming week as the economic data will provide direction to the currency.
•Further, upside in domestic market sentiments along with weakness in the DX will act as a positive factor for the Indian Rupee.
•While on the other hand, dollar demand from oil and other importers coupled with dollar buying by central bank will cap sharp upside or reversal in the currency.
Weekly Technical Levels
•USD-INR SPOT : Support 58.90/58.40 Resistance 59.70/60.10. (CMP: 59.01)
Economic Data to be released during the week:
Consumer Price Index (CPI) – 12th June’14
Time: 5:30pm
Previous : 8.59 percent
Industrial output– 12th June’14
Time: 5:30pm
Previous : -0.5 percent
Manufacturing output– 12th June’14
Time: 5:30pm
Previous : -1.2 percent
Trade deficit – tentative
Previous : $10.09 billion
Dollar Index
Weekly Price Performance
•The US Dollar Index (DX) traded on a flat note last week on the back of rise in risk appetite in market sentiments in the latter part which led to decline in demand for the low yielding currency.
•However, losses were wiped off owing to favorable economic data from the country. The currency touched a weekly high of 81.07 and closed at 80.43 on Friday.
Employment data paints an uneven recovery picture
•US Unemployment Claims increased by 8,000 to 312,000 for the week ending on 30th May’14. US ADP Non-Farm Employment Change declined by 36,000 to 179,000 in May as against a rise of 215,000 in April. Trade Balance at deficit of $47.2 billion in April from earlier deficit of $44.2 billion in March. Revised Nonfarm Productivity declined by 3.2 percent in Q1 of 2014 with respect to earlier fall of 1.7 percent in Q4 of 2013. The Institute for Supply Management (ISM) Non-Manufacturing PMI increased by 1.1 points to 56.3-level in May from 55.2-mark in April.
•US Factory Orders grew at slow pace of 0.7 percent in April from earlier rise of 1.5 percent a month ago. Investor's Business Daily (IBD)/ Economic Optimism grew by 1.9 points to 47.7-mark in June with respect to 45.8-level in May.
•US Final Manufacturing Purchasing Managers' Index (PMI) rose by 0.2 points to 56.4-mark in May as against a rise of 56.2-level in April. The Institute for Supply Management (ISM) Manufacturing PMI declined by 1.7 points to 53.2-level in last month from 54.9-mark in April.
•US Non-Farm Employment Change declined by 65,000 to 217,000 in May as against a rise of 282,000 in April. Unemployment Rate remained unchanged at 6.3 percent in the month of May. Average Hourly Earnings were at 0.2 percent in the last month.
Outlook
•We expect the Dollar Index to trade lower on the back of rise in risk appetite in market sentiments in the earlier part of trade will lead to fall in demand for the low yielding currency.
•However, forecast for positive economic data from the country will cushion sharp downside or reversal in the currency.
Weekly Technical Levels
•Dollar Index (DX) : Support 80.10/79.70 Resistance 80.90/81.40. (CMP: 80.45)
Economic Data to be released during the week:
JOLTS Job Openings – 10th June’14
Time: 7:30pm
Previous : 4.01M, Forecast : 4.04M
Retail Sales – 12th June’14
Time: 6:00pm
Previous : 0.1 percent, Forecast : 0.5 percent
Prelim UoM Consumer Sentiment – 13th June’14
Time: 7:25pm
Previous : 81.9, Forecast : 83.2
Euro
Weekly Price Performance
•The Euro traded on a positive note around 0.1 percent last week on the back of favorable trade data from the region. Also, upbeat market sentiments supported an upside in the currency.
•However, sharp upside in the currency was capped due to European Central Bank (ECB) cutting deposit rate to minus 0.1 percent and reduction in benchmark refinancing rate by 10 basis points to 0.15 percent. The Euro touched a weekly high of 1.3677 and closed at 1.3641 in the last trading session.
Economic data from the Euro Zone largely in the green
•German Factory Orders gained by 3.1 percent in April from earlier decline of 2.8 percent a month ago. Retail Raw Materials Price Index (RMPI) dropped by 1.3 points to 49.9-mark in May as against a rise of 51.2-level in April. Euro Zone Retail Sales grew by 0.4 percent in April with respect to 0.1 percent in prior month.
•Italian Manufacturing PMI declined by 0.8 points to 53.2-level in last month from 54-mark in April. Euro Zone Final Manufacturing PMI slipped by 0.3 points to 52.2-mark in May with respect to 52.5-level a month ago.
•German Trade Balance was at a surplus of 17.7 billion Euros in April as against a previous surplus of 15 billion Euros a month ago. German Industrial Production grew by 0.2 percent in April from decline of 0.6 percent in March. French Gov Budget Balance was at a deficit of 64.2 billion Euros in April with respect to deficit of 28 billion Euros in prior month. French Trade Balance was at a deficit of 3.9 billion Euros in April when compared to deficit of 4.9 billion in previous month.
•Euro Zone’s Producer Price Index (PPI) fell by 0.1 percent in April when compared to decline of 0.2 percent in prior month. Revised Gross Domestic Product (GDP) remained unchanged at 0.2 percent for Q1 of 2014.
Outlook
•The Euro will trade on a positive note over the week on the back of upbeat market sentiments coupled with weakness in the DX will act as a positive factor.
•Also, estimates of favorable economic data from the country will support gains.
Weekly Technical Levels
•EURO/USD SPOT: Support 1.3530/1.3420 Resistance 1.3700/1.3780. (CMP: 1.3640)
Economic Data to be released during the week: French Industrial Production – 10th June’14 Time: 12:15pm Previous : -0.7 percent, Forecast : 0.3 percent Industrial Production – 12th June’14 Time: 2:30pm Previous : -0.3 percent, Forecast : 0.5 percent
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Prepared by Dasharath Santra
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Weekly Technical Levels
Strategy/Recommendations
MCXSX/NSE USDINR JUNE (CMP – 59.2575)
MCXSX/NSE USDINR June as seen in the weekly chart above has opened the week at 58.4375 levels and as expected prices touched the weekly high level of 59.71 levels. In the end of the week prices corrected from the higher levels and closed below the previous week’s closing of 59.3150 levels and finally closed 0.10% lower at 59.2575 levels. As per the candlestick pattern prices has formed “Doji candlestick pattern” which is the sign of indecisive trend.
For this week we expect USDINR prices to find support in the range of 59.00 – 58.90 levels. Trading consistently below 58.90 levels would lead towards the strong support at 58.60 levels and then finally towards the major support at 58.20 levels.
Resistance is now observed in the range of 59.60 levels. Trading consistently above 59.60 levels would lead towards the strong resistance at 60.00 levels, and then finally towards the major resistance at 60.40 levels.
MCXSX / NSE USDINR Trading levels for the week
Trend: Sideways
S1 – 58.90 R1 – 59.60
S2 – 58.60 R2 – 59.90
Weekly Recommendation: Sell MCXSX/NSE USDINR June between 59.70 – 59.80, SL- 60.40, Target – 59.00 / 58.80 OR Buy MCXSX/NSE USDINR June between 59.00 - 58.80 SL 58.00, Target 59.70 / 59.80
MCX GOLD AUGUST (CMP – 25,863 / $ 1,253.10)
MCX Gold August as seen in the weekly chart above has opened the week at 25,834 levels and made a low of 25,680 levels. During this week prices bounced from lower levels towards the high of 25,999 levels. As expected at the end of the week price could not able to sustain on higher level and corrected towards 25,755 levels and finally closed 0.07% lower at 25,863 levels. As per the candlestick pattern prices has formed “Doji candlestick pattern” which is the sign of indecisive trend.
For this week we expect gold prices to find support in the range of 25,500 – 25,400 levels. Trading consistently below 25,400 levels would lead towards the strong support at 25,000 levels and then finally towards the major support at 24,500 levels.
Resistance is now observed in the range of 26,000 – 26,100 levels. Trading consistently above 26,100 levels would lead towards the strong resistance at 26,400 levels, and then finally towards the major resistance at 26,900 levels.
MCX / Spot Gold Trading levels for the week
Trend: Down
S1 – 25,400 / $ 1,228 R1 - 26,100 / $ 1,265
S2 - 25,000 / $ 1,205 R2 - 26,400 / $ 1,280
Weekly Recommendation:
Gold
Weekly Price Performance
• For continuous sixth week in a row spot gold prices have been trading lower and
hovering around $1250 mark
• Prices were pressurized on as equities in the US hits record highs reducing bullion safe
haven appeal coupled with the a huge decline in investor interest in the futures
market.
• The economic data released from US also paints a bright picture as new factory orders
gain for third straight month in a row
• On the other hand, the ECB lowered the deposit rate to -0.1 percent, meaning it will
effectively charge banks for holding their money overnight.
• It cut its main refinancing rate to 0.15 percent, and the marginal lending rate or
emergency borrowing rate - to 0.40 percent.
• ECB’s rate cut stoked investors appetite for equities and exerted downside pressure
on bullion prices
• In the International markets, gold prices gained marginally by 0.21 percent in the last
week. Gold prices touched a weekly low of $1240.61/oz before closing at
$125.2.23/oz on Friday.
• In the Indian markets, gold prices declined by 1.78 percent in the last week taking
cues from weak international markets. Gold prices touched a weekly low of
Rs.25755/10 gms before closing at Rs.25863/10 gms on Friday.
SPDR Gold Holdings
• Last week, holdings in the SPDR Gold Trust gained by 1.8 tonnes to 787.08 tonnes.
• On a year-to-date basis, holdings have declined by 11.14 tonnes, or 1.40 percent.
The European Central Bank cut interest rates to record lows
•The European Central Bank cut interest rates to record lows on Thursday, launched a series of measures to pump money into the sluggish euro zone economy, and pledged to do more if needed to fight off the risk of Japan-like deflation.
•For the first time, the ECB will charge banks for parking funds at the central bank overnight in an attempt to force them to lend to small- and medium-sized businesses. CFTC holdings:
•The Commodity Futures Trading Commission (CFTC) Commitments of Traders report in the week to June 3 showed that the bullion investors have cut their net longs positions by 17329 contracts to 51064 contract, down by 25.3%. Outlook
•From a week’s point of view, we expect gold prices to trade lower as major fundamentals suggest lack of appetite for gold as a safe haven.
•Lack of investment demand and soft physical demand coupled with rising equities in the US also indicates losing interest in the precious metal.
•Optimism in the US economy continues to build with host of economic data sets indicating momentum in the economy will pressurize prices.
•Meanwhile, speculators have cut their bullish bets on gold indicating that gold waning interest as a safe haven acting as a negative factor.
•In the Indian markets, gold prices are expected to trade lower taking cues from weakness in international markets and gold prices can possibly head towards Rs.25200 mark. Weekly Technical Levels – Trend Down
•Spot Gold : Support $1228/$1205 Resistance $1265/$1280. (CMP: $1254.70)
MCX SILVER JULY (CMP – 39,997 / $ 19.00)
MCX Silver July as seen in the weekly chart above has opened at 39,657 levels and made a low of 39,465 levels. During this week prices bounced from the lower levels towards the weekly high of 40,470 levels. As expected at the end of the week prices could not able to sustain on the higher levels and corrected towards 39,828 levels and finally closed 1.04% higher at 39,997 levels. Technically, Prices has formed a “Small Bullish candlestick pattern” which is basically sign of short covering on the lower levels.
For this week we expect silver prices to find support in the range of 39,200 – 39,000 levels. Trading consistently below 39,000 levels would lead towards the strong support at 38,500 levels and then finally towards the major support at 38,100 levels.
Resistance is now observed in the range of 40,400 – 40,500 levels. Trading consistently above 40,500 levels would lead towards the strong resistance at 41,300 levels, and then finally towards the major resistance at 41,900 levels.
MCX / Spot Silver Trading levels for the week
Trend: Down
S1 – 39,200 / $ 18.70 R1 - 40,500 / $ 19.30
S2 - 38,500 / $ 18.30 R2 - 41,300 / $ 19.80
Weekly Price Performance
• Gold prices traded on a lower side during last week, while silver prices rose by more than 1.5
percent and closed at $19/oz. Strength in the base metals complex and flat dollar index led
to price rise in the international markets. In the international markets, the white metal rose
by 1.71 percent, touched a weekly high of $19.18/oz, and closed the week at $18.97/oz.
• On the MCX, silver prices rose by 1 percent and closed at Rs.39997/kg in line with strength in
international markets. Silver prices made a weekly high of Rs.40470/kg
CFTC Holdings
• The Commodity Futures Trading Commission (CFTC) Commitments of Traders report in the
week to May 20 showed that hedge funds and money managers have raised their net short
positions by 3605 contracts to 10602 contracts.
Silver market players are in favor of an electronic, auction-based system for setting a benchmark
price
• Silver market players are in favor of an electronic, auction-based system for setting a
benchmark price with a broader base of contributors when the 'fix' ceases in August, the
London Bullion Market Association (LBMA) said on Thursday.
• The LBMA has been consulting market participants on a potential replacement for the daily
silver 'fix' since its operator said in May it would stop administering the 117-year-old
process.
Outlook
• Spot silver prices are expected to trade on a weak note taking cues from weakness in gold
prices. Waning interest in the grey metal, economic optimism in the US are all hinting
towards winding up of QE and the speculative activity in the silver will reduce leading to
price falling further in the coming weeks. Meanwhile, CFTC positions in the recent weeks
indicate net shorts have increased acting as a negative factor
• In the Indian markets, silver prices on the MCX is expected to lower and prices can possibly
head towards Rs.39200 mark
Weekly Technical Levels – Trend Down
• Spot Silver: Support $18.7/$18.30 Resistance $19.30/$19.8. (CMP: $19.08)
• Strategy: Support Rs.39200/38500, Resistance Rs.40500/41300. (CMP: Rs.40150)
MCX COPPER JUNE (CMP – 398.80 / $ 6,771)
MCX Copper June as seen in the weekly chart above has opened at 411.70 levels and as expected during this week prices made a high of 416.85 levels. We observed that prices could not able to sustain on higher levels and corrected back towards the weekly low of 396.30 levels. During this week prices have breached multi week’s lows and trading below it and finally closed 2.92% lower at 398.80 levels. Broadly from last couple of weeks prices have been trading between the support and resistance levels and this week prices have breached the support of 404 levels following with a “Big Bearish candlestick pattern” which is indication of bearish trend.
For this week we expect Copper prices to find support in the range of 392 – 390 levels. Trading consistently below 390 levels would lead towards the strong support at 384 levels and then finally towards the major support at 378 levels.
Resistance is now observed in the range of 403 - 404 levels. Trading consistently above 404 levels would lead towards the strong resistance at 409 levels, and then finally towards the major resistance at 414 levels.
MCX / LME Copper Trading levels for the week
Trend: Down
S1 – 390 / $ 6,700 R1 – 403 / $ 6,950
S2 – 384 / $ 6,600 R2 – 409 / $ 7,060
Weekly Recommendation:
Weekly Price Performance
• LME Copper prices plunged by 2 percent last week owing to probe into financing transactions
at China’s Qingdao Port that has led to concerns of falling demand in deals using the metal as
collateral. Also, rate cut by the ECB in its monetary policy meeting exerted downside pressure
on prices. Further, mixed economic data from the US and Euro Zone pushed the prices lower.
• However, positive manufacturing data from the biggest consumers, the US and China along
with 2 percent decline in inventories cushioned sharp downside in prices. The red metal
touched a weekly low of $6640/tonne and closed at $6709/tonne on Friday.
• MCX Copper prices declined by around 3 percent owing to Rupee appreciation and touched an
intra-day low of Rs.396.3/kg before closing at Rs.398.8/kg in the last trading session.
Copper Inventories
• On the LME, copper inventories plunged by around 2 percent to 167,775 tonnes in the last
week as against a closing of 171,350 tonnes in the prior week.
CFTC holdings:
• The Commodity Futures Trading Commission (CFTC) Commitments of Traders report in the
week to May 27 showed that speculators reduced net long wagers in copper to 16,240
contracts compared to net longs of 21315 in the preceding week.
Outlook
• We expect LME Copper prices to trade sideways taking cues positive economic data from the
US and China which will support an upside in prices. Also, weakness in the DX along with
favorable data from Euro Zone will support gains.
• While on the other hand, mixed global market sentiments will cap sharp gains or even reversal
in prices.
• In the Indian markets, Rupee movement will provide further direction to prices.
Weekly Technical Levels
• LME Copper: Support $6700/$6600 Resistance $6950/$7060. (CMP: $6655)
MCX CRUDE JUNE (CMP – 6,057 / $ 102.79)
MCX Crude oil June as seen in the weekly chart above has opened the week at 6,115 levels and during this week price made a high of 6,159 levels. During this week as expected prices could not able to sustain on higher levels and corrected back towards the weekly low of 6,013 levels. During this week price have closed below the previous week’s closing of 6,106 levels and finally closed 0.80% lower at 6,057 levels. As per the candlestick pattern it formed a “Bearish Candlestick Pattern” which represents the bearish trend for coming trading session.
For this week we expect Crude oil prices to find support in the range of 6,010 – 6,000 levels. Trading consistently below 6,000 levels would lead towards the strong support at 5,950 levels.
Resistance is now observed in the range of 6,120-6,130 levels. Trading consistently above 6,130 levels would lead the rally towards the strong resistance at 6,190 levels, and then finally towards the major resistance at 6,250 levels.
MCX / NYMEX Crude Oil Trading levels for the week
Trend: Down
S1 – 6,000 / $ 101.70 R1 – 6,130 / $ 104.00
S2 – 5,950 / $ 100.70 R2 – 6,190/ $ 105.00
Weekly Recommendation:
Weekly Price Performance
• Strength in the dollar index and rising OPEC production lead to fall in both brent and WTI oil
prices in the last week
• Prices traded lower on ample supply in the US and ease of tensions in Ukraine.
• Ukraine's President-elect and western leaders are working on a peace plan to end violence in
the east of the country.
• Although the inventories report released last week showed a drawdown, the stocks remain
near the top of the typical range for this time of year.
• WTI Crude oil prices declined by 0.22 percent touched a weekly low of $101.6/bbl and closed at
$102.48/bbl.
• On the domestic bourses, prices declined by 0.74 percent due taking cues from international
market. Crude prices closed at Rs.6061/bbl on Friday after touching a weekly low of
Rs.6057/bbl.
Oil Inventories
• The API released its weekly inventories report last week and US crude oil inventories fell by 1.4
million barrels to 382.5 million for the week ending on 30th May 2014.
• Gasoline stocks rose by 0.8 million barrels whereas distillate inventories fell by 0.3 million
barrels for the same time period.
• The EIA released its weekly inventories report last night week and US crude oil inventories fell
by 3.4 million barrels for the week ending on 30th May 2014.
• Gasoline stocks rose by 0.21 million barrels whereas distillate inventories rose by 2 million
barrels for the same time period.
CFTC Holdings:
•The Commodity Futures Trading Commission (CFTC) Commitments of Traders report in the week to May 27th showed that bullish bets on crude oil declined by 10893 contracts to 382260 contracts down by around 2.77 percent.
Libya's crude exports could fall to zero in days
•Libya's crude exports could fall to zero in days as the state oil company could be forced to divert the only remaining exports to the Zawiya refinery, which provides crucial gasoline to the country's capital.
•Crude from two offshore fields may be used to supply the 120,000 barrel per day refinery unless oil production from Brega in the east improves within two days, a spokesman for National Oil Corp (NOC) said.
Iran crude oil exports increased in May
•Canada almost doubled imports of crude oil from the United States in April compared with the same month a year earlier, Statistics Canada data showed on Wednesday, as the U.S. light oil boom continued to displace barrels from overseas.
•Crude exports are restricted in the United States under decades-old legislation, but companies are allowed to apply for licenses to sell oil to Canada.
•A bill introduced by U.S. Senator Edward Markey on Thursday aims to ease Ukraine's fuel dependence on Russia by modernizing its heating infrastructure and updating its Soviet-era natural gas drilling capabilities.
•Some U.S. lawmakers have called for a surge in U.S. fuel exports to help Ukraine wean itself from Russian energy supplies after President Vladimir Putin's invasion and annexation of the Crimean peninsula.
•Thomson Reuters Oil Research and Forecasts expects to close May assessment for crude arrivals into China at around 22-23 million metric tonnes (mt) which would be the lowest since October 2013 which stood at 20.42 million mt.
Outlook
•From a week’s perspective, we expect crude oil prices to trade lower on ease of tensions in the Ukrainian peninsula.
•Crude inventories in the US are high at this time of the year acting as a negative factor.
•On the other hand, driving season in the US will create incremental demand for gasoline resulting in draining of inventories.
•Meanwhile, money managers have cut their bullish bets on crude after raising their bets for continuous three week in a row will pressurize prices.
•In the Indian markets, prices are expected to trade lower taking cues from weakness in international markets and possibly head towards Rs.6050 mark.
Weekly Technical Levels
•Nymex Crude: Support $101.70/100.70 Resistance $104/$105 (CMP: $103.04)
MCX NATURAL GAS JUNE (CMP – 279 / $ 4.715)
MCX Natural Gas June as seen in the weekly chart above has opened the week at 271.90 levels and it made a low of 268.60 levels. As expected prices could not able to sustain on lower levels and bounced back towards the weekly high of 280.40 levels. At the same time price have breached preceding three week’s high and trading above it and formed a “Bullish candlestick pattern” which is the sign of optimism. Finally prices have closed 2.88% higher at 279 levels.
For this week we expect Natural Gas prices to find support in the range of 273 - 272 levels. Trading consistently below 272 levels would lead towards the strong support at 264 levels.
Resistance is now observed in the range of 285 - 288 levels. Trading consistently above 288 levels would lead towards the strong resistance at 295 levels, and then finally towards the major resistance at 305 levels.
MCX / NYMEX Natural Gas Trading levels for the week
Trend: Up
S1 - 272 / $ 4.50 R1 - 288 / $ 4.90
S2 - 264 / $ 4.30 R2 - 295 / $ 5.10
Weekly Recommendation:
Rupee
Weekly Price Performance
•The Indian Rupee traded on a flat note last week and appreciated on the back of inflow of foreign funds into debt and equity markets and optimistic domestic market sentiments.
•Further, Reserve Bank of India (RBI) allowed foreign investors to participate in foreign exchange and derivatives trading in Indian Rupee in its monetary policy meeting on Tuesday supported an upside in the currency.
•However, sharp upside in the currency was capped owing to central bank buying dollars to increase its forex reserves. Further, dollar demand from oil and other importers restricted positive movement in the currency. The Indian Rupee touched a weekly high of 58.92 and closed at 59.17-level on Friday.
RBI maintains status quo as widely expected
•The RBI (Reserve Bank of India) in its second Bi-Monthly Monetary Policy review on 3rd June 2014 maintained its status quo by keeping the Cash Reserve Ratio (CRR), repo and reverse repo rate unchanged at 4 percent, 8 percent and 7 percent respectively.
•RBI reduced the Statutory Liquidity Ratio (SLR) for scheduled commercial banks by 50 basis points (bps) from 23 percent to 22.5 percent of Net Demand and Time Liability (NDTL) with effect from the fortnight beginning on 14th June 2014. Further, central bank reduced the liquidity provided under the Export Credit Refinance (ECR) from 50 percent to 32 percent of eligible export credit outstanding with immediate effect.
Outlook
•We expect Indian Rupee to trade on a mixed note in the coming week as the economic data will provide direction to the currency.
•Further, upside in domestic market sentiments along with weakness in the DX will act as a positive factor for the Indian Rupee.
•While on the other hand, dollar demand from oil and other importers coupled with dollar buying by central bank will cap sharp upside or reversal in the currency.
Weekly Technical Levels
•USD-INR SPOT : Support 58.90/58.40 Resistance 59.70/60.10. (CMP: 59.01)
Economic Data to be released during the week:
Consumer Price Index (CPI) – 12th June’14
Time: 5:30pm
Previous : 8.59 percent
Industrial output– 12th June’14
Time: 5:30pm
Previous : -0.5 percent
Manufacturing output– 12th June’14
Time: 5:30pm
Previous : -1.2 percent
Trade deficit – tentative
Previous : $10.09 billion
Dollar Index
Weekly Price Performance
•The US Dollar Index (DX) traded on a flat note last week on the back of rise in risk appetite in market sentiments in the latter part which led to decline in demand for the low yielding currency.
•However, losses were wiped off owing to favorable economic data from the country. The currency touched a weekly high of 81.07 and closed at 80.43 on Friday.
Employment data paints an uneven recovery picture
•US Unemployment Claims increased by 8,000 to 312,000 for the week ending on 30th May’14. US ADP Non-Farm Employment Change declined by 36,000 to 179,000 in May as against a rise of 215,000 in April. Trade Balance at deficit of $47.2 billion in April from earlier deficit of $44.2 billion in March. Revised Nonfarm Productivity declined by 3.2 percent in Q1 of 2014 with respect to earlier fall of 1.7 percent in Q4 of 2013. The Institute for Supply Management (ISM) Non-Manufacturing PMI increased by 1.1 points to 56.3-level in May from 55.2-mark in April.
•US Factory Orders grew at slow pace of 0.7 percent in April from earlier rise of 1.5 percent a month ago. Investor's Business Daily (IBD)/ Economic Optimism grew by 1.9 points to 47.7-mark in June with respect to 45.8-level in May.
•US Final Manufacturing Purchasing Managers' Index (PMI) rose by 0.2 points to 56.4-mark in May as against a rise of 56.2-level in April. The Institute for Supply Management (ISM) Manufacturing PMI declined by 1.7 points to 53.2-level in last month from 54.9-mark in April.
•US Non-Farm Employment Change declined by 65,000 to 217,000 in May as against a rise of 282,000 in April. Unemployment Rate remained unchanged at 6.3 percent in the month of May. Average Hourly Earnings were at 0.2 percent in the last month.
Outlook
•We expect the Dollar Index to trade lower on the back of rise in risk appetite in market sentiments in the earlier part of trade will lead to fall in demand for the low yielding currency.
•However, forecast for positive economic data from the country will cushion sharp downside or reversal in the currency.
Weekly Technical Levels
•Dollar Index (DX) : Support 80.10/79.70 Resistance 80.90/81.40. (CMP: 80.45)
Economic Data to be released during the week:
JOLTS Job Openings – 10th June’14
Time: 7:30pm
Previous : 4.01M, Forecast : 4.04M
Retail Sales – 12th June’14
Time: 6:00pm
Previous : 0.1 percent, Forecast : 0.5 percent
Prelim UoM Consumer Sentiment – 13th June’14
Time: 7:25pm
Previous : 81.9, Forecast : 83.2
Euro
Weekly Price Performance
•The Euro traded on a positive note around 0.1 percent last week on the back of favorable trade data from the region. Also, upbeat market sentiments supported an upside in the currency.
•However, sharp upside in the currency was capped due to European Central Bank (ECB) cutting deposit rate to minus 0.1 percent and reduction in benchmark refinancing rate by 10 basis points to 0.15 percent. The Euro touched a weekly high of 1.3677 and closed at 1.3641 in the last trading session.
Economic data from the Euro Zone largely in the green
•German Factory Orders gained by 3.1 percent in April from earlier decline of 2.8 percent a month ago. Retail Raw Materials Price Index (RMPI) dropped by 1.3 points to 49.9-mark in May as against a rise of 51.2-level in April. Euro Zone Retail Sales grew by 0.4 percent in April with respect to 0.1 percent in prior month.
•Italian Manufacturing PMI declined by 0.8 points to 53.2-level in last month from 54-mark in April. Euro Zone Final Manufacturing PMI slipped by 0.3 points to 52.2-mark in May with respect to 52.5-level a month ago.
•German Trade Balance was at a surplus of 17.7 billion Euros in April as against a previous surplus of 15 billion Euros a month ago. German Industrial Production grew by 0.2 percent in April from decline of 0.6 percent in March. French Gov Budget Balance was at a deficit of 64.2 billion Euros in April with respect to deficit of 28 billion Euros in prior month. French Trade Balance was at a deficit of 3.9 billion Euros in April when compared to deficit of 4.9 billion in previous month.
•Euro Zone’s Producer Price Index (PPI) fell by 0.1 percent in April when compared to decline of 0.2 percent in prior month. Revised Gross Domestic Product (GDP) remained unchanged at 0.2 percent for Q1 of 2014.
Outlook
•The Euro will trade on a positive note over the week on the back of upbeat market sentiments coupled with weakness in the DX will act as a positive factor.
•Also, estimates of favorable economic data from the country will support gains.
Weekly Technical Levels
•EURO/USD SPOT: Support 1.3530/1.3420 Resistance 1.3700/1.3780. (CMP: 1.3640)
Economic Data to be released during the week: French Industrial Production – 10th June’14 Time: 12:15pm Previous : -0.7 percent, Forecast : 0.3 percent Industrial Production – 12th June’14 Time: 2:30pm Previous : -0.3 percent, Forecast : 0.5 percent
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Prepared by Dasharath Santra
( For any personal query mail me at support@mamatainfotech.com or call me at +91 9932242442, 9932461166 )
