Orange juice comes off its all-time record high, WTI slips while gold bounces back
Outlook on WTI, orange juice and gold as the US dollar continues to appreciate.
WTI tries to stabilise after 4% drop
WTI, which dropped by over 4% as US lawmakers try to push a debt ceiling agreement through congress and as Russia is apparently not adhering to an earlier OPEC+ agreement to cut output, is trying to stabilise on Wednesday.
It has so far managed to hold above Tuesday’s $69.08 low despite top oil importer China PMIs pointing towards slower growth in services and a contraction in manufacturing activity.
Nonetheless a slip through $69.08 this week looks more probable than a bullish reversal to above the two-month downtrend line at $73.20 taking place.
A fall through $69.08 would put the March and early May lows at $64.37 to $63.77 back on the map. Minor resistance can be spotted between the 22 and 25 May lows at $70.66 to $71.01.
Gold bounces off six-month uptrend line
The price of gold dropped to the November-to-May uptrend line at $1,933 per troy ounce amid ongoing US debt ceiling negotiations but bounced off it.
In doing to it rose above its one-month downtrend line at $1,954 which now acts as a support line. While it holds on a daily chart closing basis, the mid-April low at $1,970 is expected to be revisited. Further up the 55-day simple moving average (SMA) can be seen at $1,989.
A now unexpected failure at $1,933 would engage the $1,901 to $1,897 mid- to late January lows.
Orange juice comes off its all-time record high
Extreme weather and prolific citrus disease have pushed front month orange juice futures to a new all-time record high at around $2.87 per pound last week before swiftly coming off by over 3% on Tuesday on news that supply issues might soon be resolved.
Given the speed of Tuesday’s fall in the price of orange juice, further downside risk remains in play with the 8 May high at $2.71 representing the next downside target. Further down lies last week’s price gap at $2.6693 to $2.6430 which may get filled over the coming days.
Resistance is seen at the $2.8038 April peak and at last week’s $2.8721 record high.
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