Oil Technical Analysis for July 12, 2011
Light Sweet Crude
The CL contract fell on Monday as traders were selling off anything risk-related around the world . As such, the market fell below the $95 level, but found a bid later in the day. Because of this, we formed a hammer at the $95 mark. Because of this, we think that the pullback could possibly be a chance to buy.
The COIL contract behaved the same as CL on Monday , including the bid it got later in the session. The market looks like it is going to fight tooth and nail any serious attempts to sell off. Because of this, we are still positive and constructive of this market. We like buying dips at this point.
Oil Fundamental Analysis for July 12, 2011
Crude oil prices extended their drop on Monday, as concerns over the outlook for demand mounted amid the weak jobs report from the United States last Friday, while mounting concerns from the European debt crisis amid speculations Italy will be the next victim also weighed down on confidence among traders, as they targeted lower yielding assets instead of higher yielding assets, which put downside pressure on crude oil prices.
If pessimism continues to dominate financial markets, we should expect crude oil prices to remain under pressure , noting that the FOMC Minutes are not expected to provide anything new regarding the outlook of the world’s largest economy.
Tuesday July 12:
From the United States the week will start with the May trade figures at 12:30 GMT, where the deficit is expected to have widened to $44.1 billion from $43.7 billion.
Also on Tuesday will be the minutes of the last FOMC meeting on June 21&22 at 18:00 GMT. Comments from the Feds about the weak economy or signals for more monetary easing and support to the economy will be the main mover on the market, yet in general, the minutes are not expected to add anything new to what Bernanke already said.
Natural Gas Technical Analysis for July 12, 2011
The natural gas markets rose during the Monday session as the $4.20 area has proven its resiliency. The market has been in consolidation between $4 and $5 for ages now, and we think that will continue to be the case. Buying on dips is encouraged.
Natural Gas Fundamental Analysis for July 12, 2011
Natural gas prices extended their gains on Monday, as weather forecasts suggest that temperatures will be higher than their average for this time of the year in the United States, which pushed natural gas prices higher.
Expectations of warm weather conditions could push natural gas prices further to the upside , since it will increase speculations of rising demand for power-plant fuel to meet rising cooling demand.
Gold Technical Analysis for July 12, 2011
The gold markets rose again on Monday, and showed that the commodity is looking to break above the $1,550 level for good. The $1,560 area is the top of this resistance area, and the market is pausing at that level. However, if we pullback – it looks like a great place to buy on the dips. A failure to get above the $1,560 area could signal a range being formed between $1,475 and $1,550.
Gold Fundamental Analysis for July 12, 2011
Gold started the week on Monday with continued bullishness on prevailing jitters and woes over the global recovery and the worsening outlook for the debt crisis in Europe.
Gold gained most of the day on widening fears that the debt crisis is deepening as euro area finance chiefs met in Brussels and EU officials held an emergency meeting to discuss the crisis and whether Italy was at risk of the spreading crisis that will be catastrophic on the market .
On Tuesday the market will continue to focus on the debt crisis amid already profound fears over slowing growth after Friday’s abysmal US payroll figures and rising inflation from China over the weekend ahead of the GDP this week that is also expected to show slowing pace of growth.
The comments from the finance chiefs and EU officials will be the focus as the second day of meetings continues in Brussels when the EU 27 finance ministers meet which is likely to be focused on the debt crisis and stress test results which might be released sometime this week.
The upside momentum is seen for gold on haven demand though the heavy losses across commodities and equities might pressure the gold to the strong dollar on some liquidations and accordingly the volatility will remain high after nearly consecutive gains that might ease the metal’s rally.
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