WTI and orange juice rally on supply worries while copper drops on China growth fears
Outlook on WTI, orange juice and copper as the US dollar remains bid.
WTI extends this week’s gains
WTI is trading in three-week highs as a comment by a Saudi energy minister stoked fears of further OPEC+ production cuts at its June 4 meeting. The break through the April-to-May downtrend line at $72.40 and Tuesday’s daily chart close above the 10 May high at $73.82 high puts the bulls back in control. The 55-day simple moving average (SMA) at $74.48 represents the next upside target, followed by the £75.76 late March gap low point. Slips should find support around the mid-May high at $73.31 and further down along the breached April-to-May downtrend line at $72.40. While the next lower $70.66 low from Monday underpins, renewed upside pressure is likely to ensue.
Orange juice price surges higher
Front month orange juice futures have accelerated to the upside on renewed supply concerns following the worst orange crop in Florida since the 1920s. Unless Brazil increases its supply, the citrus fruit price is expected to rally further and might soon reach the psychological $3 per pound mark. This year’s all-time record high at $2.8038 has briefly been overcome on Tuesday with a new intraday high being reached at $2.8125. Minor support sits around the 8 May high at $2.5348 and further potential support at this week’s $2.6663 to $2.6430 price gap.
Copper drops to six-month low
The price of copper has fallen to levels last traded in November of last year as questions around the strength of China’s economic recovery are raised. The October high and November 2022 lows at $7,877 to $7,850 per ton are now in focus but may offer support. While resistance at the mid-May $8,089 low caps, further downside is in store. Only a currently unexpected bullish reversal and rise above the 200-day simple moving average (SMA) at $8,372 would question this view.
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