FCPO Support at 5,000?
CPO plunged and closed sharply lower at 5629 last week.
What caused palm oil prices deep drop last week?
1. Indonesia announced surprised policy U-turn to remove export volume restrictions on palm oil products and raised its export levy from $375 per tons to $675 per tons.
Indonesia government also subsidize bulk cooking oil starting from 1st April 2022 to cool prices and maintain purchasing power.
2. Argentina imposed new export restrictions that temporarily suspended exports for soybean flour and oil amidst rumours if is planning to hike taxes due to surge in primary material costs following Russia’s invasion of Ukraine
3. Weakness in Crude oil prices as traders focus on the progress of ceasefire talks between Russia and Ukraine which may reduce demand for biofuel
4. China sold their cooking oil reserves as buyers favor more on discounted SBO over palm oil as premium products. Besides, resurgence of coronavirus fears in China dampening market sentiment
5. Soybean oil declined on positive weather for crops in South America ease dry crops.
Technical View:
1. Obviously Long Black bar formed after palm oil prices deep drop last week which indicates sell signal.
2. Stochastic K% line is moving down in weekly and daily chart which indicates sell signals. However K% near to oversold in daily chart, which indicates market likely to rebound before further drop.
We expect market may bounce if touch on immediate support level at 5365 before further drop.
Suggestion Trade:
Short if stay below 5600
Target Stop Loss (resistance level) 5803
Target Profit level (support level)
TP1 5397 TP2 4991
Long if stay above 6300
Target Stop Loss (support level) 6097
Target Profit level (resistance level)
TP1 6503 TP2 6909
Disclaimer: Trading Carries Risks.
Happy Trading!! Cheers.
What caused palm oil prices deep drop last week?
1. Indonesia announced surprised policy U-turn to remove export volume restrictions on palm oil products and raised its export levy from $375 per tons to $675 per tons.
Indonesia government also subsidize bulk cooking oil starting from 1st April 2022 to cool prices and maintain purchasing power.
2. Argentina imposed new export restrictions that temporarily suspended exports for soybean flour and oil amidst rumours if is planning to hike taxes due to surge in primary material costs following Russia’s invasion of Ukraine
3. Weakness in Crude oil prices as traders focus on the progress of ceasefire talks between Russia and Ukraine which may reduce demand for biofuel
4. China sold their cooking oil reserves as buyers favor more on discounted SBO over palm oil as premium products. Besides, resurgence of coronavirus fears in China dampening market sentiment
5. Soybean oil declined on positive weather for crops in South America ease dry crops.
Technical View:
1. Obviously Long Black bar formed after palm oil prices deep drop last week which indicates sell signal.
2. Stochastic K% line is moving down in weekly and daily chart which indicates sell signals. However K% near to oversold in daily chart, which indicates market likely to rebound before further drop.
We expect market may bounce if touch on immediate support level at 5365 before further drop.
Suggestion Trade:
Short if stay below 5600
Target Stop Loss (resistance level) 5803
Target Profit level (support level)
TP1 5397 TP2 4991
Long if stay above 6300
Target Stop Loss (support level) 6097
Target Profit level (resistance level)
TP1 6503 TP2 6909
Disclaimer: Trading Carries Risks.
Happy Trading!! Cheers.
Disclaimer
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