Commodity markets were savaged yesterday with the bullion and oil markets taking the brunt of the fall

<p>Silver Range: 34.30 – 35.60 Support: 33.50 Resistance: 37.00 Commodity markets were savaged yesterday with the bullion and oil markets taking the brunt of the fall. […]</p>

Range: 34.30 – 35.60
Support: 33.50
Resistance: 37.00
Commodity markets were savaged yesterday with the bullion and oil markets taking the brunt of the fall. Silver is widely blamed for setting the ball rolling, falling from early highs of $39.57 to $34.29 as massive long liquidation/margin call selling snowballed into gold and oil markets. A 4th hike in margin requirements over the last week from the CME was a likely trigger that broke the bulls, but the rise in Silver has been so dramatic this year that a sharp correction looked inevitable and maybe didn’t come as surprise to everyone. Gold followed the flows peaking early morning at $1522.10 and then shedding almost $60 to a low of $1462.70. Asian markets today have seen a tentative rally in both metals with Silver pulling back up to $35.63 and gold to $1490.15, but both are currently struggling to hold onto any upside momentum ahead of this afternoon’s NFP data from the US.
Range: 80.06 – 80.65
Support: 79.50
Resistance 81.00
Opened in Asia at Y80.15 after a sharp fall to Y79.56 yesterday as a flood of stops went through in the crosses, but the end of Golden Week saw some strong early dollar demand from Japanese investor accounts and short covering from US names allied to strong cross buying in euro-yen and aussie-yen into the Tokyo fixing. Dollar rose to Y80.61 before easing back to settle around Y80.50. Euro-yen opened at Y116.44 and rose steadily to Y117.43, before easing back to Y117.00. Aussie-yen opened at Y84.72 and picked up sharply to Y86.38, before hovering around Y86.00. Talk of intervention from the MOF appears to have subsided on comments from Econ Min Yosano who considers the recent market moves as dollar weakness rather than yen strength. The lack of any real bounce following dollar strength elsewhere still leaves cause for concern. Focus today will be largely on the US NFP data this afternoon.
Range: 1.4533 – 1.4588
Support: 1.4500
Resistance 1.4600


Rate opened Asia around $1.4540, as the recovery continued, only to be shoved back to $1.45339 in early trade before euro-yen demand from a returning Japanese market pushed rate up to $1.4588. Rate reversed tack as euro-yen demand dried up, the rate dropping back to the opening level of $1.4540, squeezing down to retest earlier lows before recovering ahead of the European open to $1.4575. Rate currently trades around $1.4565. Risk trades seen in a broad consolidation, following on from the sharp sell off/risk aversion move Thursday, with attention turned toward this afternoon’s key US NFP data. German industrial production data due up before hand at 1000GMT. Bids said to be in place between $1.4510/490, with further interest seen dotted down toward $1.4450, though traders have warned in morning notes that hopes for sovereign demand to cushion dips may prove to be not as strong as in previous sessions.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.