Commodities prices are yielding mixed results in European trade, with growth-geared crude oil and copper prices are ticking lower while gold and silver are little changed. Price action likely reflects pre-emptive positioning ahead of the day’s docket of US economic data.
Durable goods orders and pending home sales growth is forecast to slow in June, weighing on demand expectations for cyclically sensitive commodities. Precious metals are holding up as signs of slowdown stoke Fed stimulus hopes and boost demand for alternative store-of-value assets amid fears of further dilution of the US dollar.
The Kansas City Fed Manufacturing Activity survey may offer a bit of an offset, with expectations calling for a mild improvement in July. Comments from US Treasury Secretary Tim Geithner may prove to be a wildcard as he testifies to the Senate Banking Committee on the impact of the on the euro-zone debt crisis.
Prices continue to test resistance in the 3.378-90 area marked by the July 10 daily close and the 23.6% Fibonacci expansion. A clear break higher exposes the 14.6% level at 3.445. Trend line support comes in at 3.334, with a push below that targeting the 38.2% Fib at 3.269.
Prices are testing support in the 87.65-88.32 area, marked by the July 3 closing high and the 14.6% Fibonacci expansion. A break downward initially exposes the 23.6% level at 85.37. Near-term resistance lines up at 93.21, the July 19 high.
