Daily Commodity Outlook, May 6, 2020

<p><span>The market showed directionless as stocks in Asia began the session mixed, with investors weighing optimism that more economies are moving toward easing lockdowns against cautionary comments from Federal Reserve officials. Oil extended its rebound. The biggest concern in the market is regarding the infection rates and whether there is the so-called second wave, so as we ease these lockdowns there remains the risk that of course you then have to tighten up the controls. That’s why investors around the world are going to be relatively cautious about how they ease these lockdowns.</span></p>
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<p><span>Gold might have reached a periodic peak with a lot of bad news and has already been priced into financial markets. It makes sense for the speculative positions to realize profits and get out of the game upon reviving optimism. The last time the speculative net long position reached record highs, the gold price fell by 18% over the next five months. Meanwhile, central banks QEs have remained the bullish factors for gold as currency debasement gives investors incentive to go into gold. But as optimism seems quite strong from the Covic-19 situation, we might see some downside for gold. </span></p>
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<p><span>London copper prices rose to their highest in nearly a week on Wednesday, amid hopes of better demand as countries start to ease coronavirus-induced restrictions. Some countries have announced plans to gradually remove restrictions that were imposed to contain the coronavirus pandemic, which could indicate more increasing supply for copper as business activities increase.</span></p>
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<p><span>Despite extending its gains over the last few days, the oil rally looks to be running out of steam as optimism that output cuts are easing were countered with hesitation over what now seems to be a long and uncertain road to recovery. Despite cuts made by OPEC and the US, market experts are cautioning that the oil market will continue to remain oversupplied for several weeks. Fears over a 2nd wave of virus outbreak still dampen the global demand for oil. In line with the slow and upwards-drifting oil prices, the CAD has also been steadily outperforming against the USD. However, the strength in CAD could be shortlived given last week’s disappointing economic data announcements. Further weakness in the Canadian economy could very well weaken the CAD further.</span></p>
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<p><b>Technical &amp; Trade views</b></p>
<p><b>USDCAD (</b><b>Intraday bias: bearish below 1.40628)</b></p>
<p><img class="aligncenter size-large wp-image-42984" src="http://blog.tickmill.com/wp-content/uploads/2020/05/usdcad-1024×471.png" alt="" width="1024" height="471" srcset="https://blog.tickmill.com/wp-content/uploads/2020/05/usdcad-1024×471.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/05/usdcad-300×138.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/05/usdcad-768×353.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/05/usdcad.png 1055w" sizes="(max-width: 1024px) 100vw, 1024px" /></p>
<p><span>Price currently in a descending channel and reacted below channel resistance. MACD also holding below 0, within bearish territory as well. A further push down below 1st resistance at 1.40628 towards 1st support (key Fibonacci level) at 1.39588 is expected.</span></p>
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<p><b>UKOIL (</b><b>Intraday bias: bearish below 32.21)</b></p>
<p><img class="aligncenter size-large wp-image-42985" src="http://blog.tickmill.com/wp-content/uploads/2020/05/ukoil-1024×470.png" alt="" width="1024" height="470" srcset="https://blog.tickmill.com/wp-content/uploads/2020/05/ukoil-1024×470.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/05/ukoil-300×138.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/05/ukoil-768×353.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/05/ukoil.png 1052w" sizes="(max-width: 1024px) 100vw, 1024px" /></p>
<p><span>Price drifted higher overnight, however it failed to break above the longer term 78.6&amp; Fibonacci retracement level. Price made a bearish engulfing and reacted below 1st resistance at 32.21. A short term push down towards 1st support at 27.48 is expected. Stochastics is also reacting below resistance where price reacted off in the past as well. However watch 1st resistance closely. A close above the level will see oil price rise further.</span></p>
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<p><b>XAUUSD ( </b><b>Intraday bias: bearish below 1745.35) </b></p>
<p><img class="aligncenter size-large wp-image-42986" src="http://blog.tickmill.com/wp-content/uploads/2020/05/xauusd-1024×474.png" alt="" width="1024" height="474" srcset="https://blog.tickmill.com/wp-content/uploads/2020/05/xauusd-1024×474.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/05/xauusd-300×139.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/05/xauusd-768×355.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/05/xauusd.png 1057w" sizes="(max-width: 1024px) 100vw, 1024px" /></p>
<p><span>We turned bearish as price is approaching 1st resistance at </span><span>1745</span><span>.35 where the horizontal swing high resistance is. Price is likely to drop towards 1st support at 1642.36  where the 38.2% fibonacci retracement and horizontal overlap support are.</span></p>
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<p><b>XCUUSD ( </b><b>Intraday bias: bearish below 2.4127)</b></p>
<p><img class="aligncenter size-large wp-image-42987" src="http://blog.tickmill.com/wp-content/uploads/2020/05/xcuusd-1-1024×464.png" alt="" width="1024" height="464" srcset="https://blog.tickmill.com/wp-content/uploads/2020/05/xcuusd-1-1024×464.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/05/xcuusd-1-300×136.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/05/xcuusd-1-768×348.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/05/xcuusd-1.png 1060w" sizes="(max-width: 1024px) 100vw, 1024px" /></p>
<p><span>We turned bearish as price is approaching 1st resistance at </span><span>2.4127</span><span> where the horizontal swing high resistance and 50% fibonacci extension are. Price is likely to drop towards 1st support at 2.2744  where the 50% fibonacci retracement and horizontal overlap support are.</span></p>
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