Markets lacking direction for the time being as prices continue to consolidate.
The overall technical outlook continues to improve with increasing evidence suggesting a major cyclical bottom to have been secured in mid-March, though the past three months’ recovery still appears poorly based with further accumulative action needed prior to the development of a sustainable bull trend. Hence, a period of choppy reconsolidation is anticipated in the weeks ahead with immediate rally attempts likely to again meet strong overhead resistance at 5,930/50 initially, then 6,010/30 with prices vulnerable to renewed bouts of weakness. Local support starts at 5,650/70, which, if broken, would signal 5,440/60 next.
Trading strategy: Preferring the long side but awaiting potentially sharp corrective pullback ahead of buying.
Short-term technical studies have clearly improved with a secondary basing pattern confirmed to be in place, though initially upside objectives in the 1,630/40 area have been achieved with recent gains in need of correction and reconsolidation. Local support in the 1,560/70 zone could come under renewed examination in the coming days, which, if decisively breached, could extend near-term falls closer to the 1,520/30 region ahead of better demand being stimulated. Overhead resistance remains in place at 1,630/40 with a clear and sustained break above here needed to regenerate upward momentum.
Trading strategy: Remaining on the sidelines for the time being, awaiting next directional signal.
Short-term trends look to have turned up with prices appearing capable of heading higher in the weeks ahead, while upward progress remains rather laboured with regular corrective dips anticipated along the way. Expect immediate pullbacks to be cushioned by support, which extends down to the 1,950/60 area with only a clear and sustained break beneath here likely to threaten the improved outlook. Unless achieved, further tests of the 2,090/2,100 zone are likely in the coming days, which, if decisively breached, would confirm next objectives set in the 2,190/2,200 region.
Trading strategy: Would now be preferring the long side but only on corrective pullbacks.
Intermediate trends remain rather flat with prices continuing to oscillate within the confines of a broad and rather choppy trading range. Expect immediate rally attempts to again meet strong overhead resistance starting at 1,810/20 with a clear and sustained break above here needed to generate renewed upward momentum and signal a test of the 1,900/10 region next where better supply should then be stimulated. Near-term pullbacks should be cushioned by supports waiting at 1,710/20 initially, with only a market close back under here likely to put values under more serious downward pressure.
Trading strategy: With prices back into a trading range situation, remaining on sidelines for now.
Long-term downtrends are undisturbed with immediate recovery attempts considered to be corrective action only, while increasing technical evidence suggests an important cyclical low to have been completed in mid March. However, prior to the emergence of a new and sustainable bull trend, further accumulative action appears necessary with near-term rally attempts likely to again be restricted by resistance which extends up to the 13,400/13,500 area. Until a sustained break above here can be secured, further two-way market action is anticipated with support now at 12,400 then 11,800.
Trading strategy: Remaining on the sidelines for the time being as reconsolidative phase continues.
Overall technical studies remain decisively bearish with little evidence of a bottom to this major downward cycle as yet, though short-term trends are pointed up with the past three months’ corrective recovery continuing for the time being. Expect strong overhead resistance to be encountered on approach to the 17,800/17,900 region with this market still vulnerable to renewed bouts of weakness in the days and weeks ahead. Support is now visible starting at 15,300 then 14,600/14,700 with a close beneath here needed to trigger deeper falls and set up a retest of the 13,100/13,200 zone.
Trading strategy: Monitoring the current corrective phase for an opportunity to re-establish shorts.
While underlying bullish patterns remain firmly in force with prices still expected to trend closer to the 1,800 region in the weeks ahead, short-term trends have again flattened out with a fresh period of choppy reconsolidation currently being experienced. Expect the current upward leg to again meet strong overhead resistance in and around the important 1,765.0/70.0 area with a clear and sustained break above here needed to regenerate upward momentum and set values on course to challenge out target in the 1,795.0/1,800.0 region where better supply should then be stimulated. Support starts now at 1,735.0/40.0
Trading strategy: Continuing to buy dips/holding longs looking for the 1,800.0 region. Protecting profits now under 1,735.0.
Short- to medium-term technical studies have clearly improved with prices breaking decisively to the upside from the confines of the past months’ reconsolidative pattern. The market looks capable of challenging the 19.50/70 area in the days and weeks ahead and while interim resistance should be encountered in and around the 18.30/50 region, immediate pullbacks are likely to be limited to corrective dips only for the time being. Local support is now visible starting at 16.50/70 then again towards the more important 15.40/60 zone with only a close back under here likely to trigger deeper near-term falls.
Trading strategy: Preferring the long side now but only on corrective dips looking for 18.80/19.60 regions.
The data shown and the views expressed on this sheet are for information purposes only and do not constitute recommendations to trade. Cliff Green Consultancy does not accept any liability for loss or damage suffered through any actions taken or not taken as a result of reading any information provided herein.
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