After a supportive
week of depreciating dollar commodities are getting hit by sell off in equities
and overall negative sentiment in risk assets. While the dollar should have
been helping commodities rise, it wasn’t entirely the case even last week and the
air was filled with tension especially after the FOMC meeting on Wednesday
where the Fed noted inflation is on track. The most negative impact was on the
Energy sector, Grains are holding relatively well and Sugar had also a few good
days as investors were probably liquidating some of their shorts.
Oil
The more aggressive
central bank outlook scared investors all over the market place and made them
scale back on the positions built in the last year. Oil traders joined the crowd
in selling their positions although the selloff wasn’t that aggressive as in
equities ahead of a series of monthly report. Tuesday we have EIA and next
Monday Opec and Tuesday IEA Monthly oil reports will give us a hint how these institutions
see the development of market fundamentals.
Corn
The sector
of grains saw a good week after news about drought in South America (corn and
soybeans) and Kansas, Oklahoma (winter wheat) made traders liquidate a huge
part of their shorts. However the magnitude of short covering increased the likelihood
of additional selling if negative news will not be confirmed.
Sugar
The huge
short that was built up during the last year is the biggest obstacle ahead of
the bears despite the negative fundamentals persist. The raw sugar #11 traded
in New York could not break the 13 cents psychological support last week and
this changed the sentiment into more bullish, or at least less bearish. The
prices rallied recently up to 13.90 that was most probably caused by the
liquidation of some of the shorts at least. We will know more before the week
end.
Good Luck
and remember to watch your risk and be consistent
Mr. Tech Man
DISCLAIMER:
This material was created for informational purposes only and represents the
Land of Trading team’s view of the past and current economic and capital market
environment. It is not an investment advice and should not be viewed that way
at all, and the creators of this material cannot be held liable for any
potential losses resulting from trading, where despite this disclaimer someone
would consider this material as an investment advice. All rights reserved ©2016-2018.
Contact:
landoftradingATgmailDOTcom, Blog: landoftrading.blogspot.com
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