Brent oil is looking south, having witnessed a bear flag breakdown on the hour chart.
As of writing, the front-month contract is changing hands at $84.26 per barrel. The RSI o the hourly and dailies is biased toward the bears. Notably, the daily RSI has rolled over from the overbought territory and has breached the rising trendline.
I would want to sell oil for re-test of $82.64 with stops above $85.14.
The broader outlook would still remain bullish as the 50-day, 100-day and 200-day are sloping upwards and are located one above the other.
Copper has gained 6.3 percent this week and looks set to close above $3.30 (July 2014 high). It would only bolster the bullish technical setup, as indicated by the inverse head-and-shoulders breakout, solid rebound from the falling trend line in March and a rise above the ascending trendline.
Above $3.30, next big resistance is seen at $3.4617 (Dec. 23, 2013 high).
An uptick in copper prices is usually considered a positive sign for the global economy and also for the Australian dollar.
The weekly chart below shows a nice symmetrical triangle pattern…Prices breached support of weekly 100-MA (still sloping upwards) and $1214.40 (May low). The metal extended losses to $1204.70 earlier today before recovering to $1212.60.
I feel the metal has found a temp low at $1204.70 and is likely to extend the recovery to $1219 and $1230 levels…. mainly because the 10-year treasury yield is yet again struggling to break above 2.4%.
Going by the technical rules, the bulls – inverse head and shoulders – should win the battle because — Head and Shoulders (bearish reversal) works best when it appears at the top of a bull market. while the inverse head and shoulders (bullish reversal) works best when it appears at the bottom of the bear markets.
Over here, the inverse head and shoulders pattern is being formed at the bottom of a 7-1/2 year sell-off…
Looks like the technical correction has ended. As of now, oil is trading below $44.08 – 38.2% Fib retracement of the rally from Feb low.
The sell-off yesterday is nothing more than a technical pull back that allows the short-term MAs catch up with the price action. Prices are on the rise and are expected to revisit 50-DMA hurdle seen today at $49.53.
Buy around $48.50 Objective $49.53 Stops below 48.00. Stop might be blown, given it is too close, but i would not hesitate to re-enter longs…again