Brent crude oil, orange juice stabilise while copper advances as US debt ceiling bill gets signed
Outlook on Brent crude oil, orange juice and copper as US House of Representatives approves bill to raise debt ceiling.
Brent crude oil prices finds interim support
The price of Brent crude oil, having dropped by over 6% over the past two days on possible weaker Chinese demand, a surprise build in US crude inventories and as Russia doesn’t adhere to its OPEC+ agreed output cuts, is stabilising.
Better-than-expected Chinese manufacturing PMI from the private Caixin survey led to buying on Thursday and so far has taken the oil price back towards the $73.37 mid-May low which may act as initial resistance. Above it lies further minor resistance at the 17 May $74.02 low and also at the 22 May $74.47 low.
On Wednesday Brent crude oil stabilised marginally above its $71.40 early May low, along the March-to-May support line at $72.20 on a daily chart closing basis. Earlier this morning it also acted as support.
Only a currently unexpected drop through the $71.51 to $71.40 support zone would lead to the March trough at $70.09 being hit.
Copper recovery off its six-month low is gaining traction
The price of copper is in the process of breaking through its two-month downtrend line at $8,130 per ton as the US House of Representatives approved a bill to raise the debt ceiling.
It will now be sent to the Senate, which is expected to rubber stamp the bill before President Joe Biden can sign it into law ahead of June 5, when the US would be in default.
If the copper price were to close on the daily chart above Tuesday’s $8,185 high, the last reaction high, it could extend its recent gains to the 200-day simple moving average (SMA) at $8,373.
This technical view will remain valid as long as the last reaction low, that is Wednesday’s low at $8,038, underpins on a daily chart closing basis.
Orange juice price flirts with uptrend line
Front month orange juice futures have come off last week’s all-time record high at $2.8721 and are likely to retest their one-month uptrend line at $2.7030 as Brazil may increase its supply.
If slid through, the 8 May high at $2.5348 would be eyed with further potential support sitting at last week’s $2.6663 to $2.6430 price gap. Resistance remains to be seen around the $2.8038 April high.
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