Having initially reacted negatively to the the Chinese stimulus two weeks ago the futures found buying support at the 55 day average. The bulls maintain control pushing the futures back to (and slightly above) the highs from the 21 – 05 – 20
Control, but not dominance, four days of upward price action is now starting to look heavy as the futures reach a ceiling created by the lows at the end on January and February.
A 20% plus rally driven by the emergence of China after the pandemic, with the expectation of stimulus packages around the globe has created strong buying support and a 50 day trending environment.
The price movement and the increased length of time in the upward move point to dominance but questions are now being asked. China has emerged, maybe not to pre-virus levels but they are getting there, the rest of the leading economies are taking cautious steps and have along way to go. The world’s largest economy is suffering from civil unrest adding to the uncertainty.
Dominance holds for now, recovery is going to be a key factor for any advance; the issue is Peru. Bordered with Brazil the current epicenter in South America, if production drops then it could counter economic uncertainty leaving the metal treading water.
(FIS)