CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

Iron ore feels the weight of demand concerns

Article By: ,  Market Analyst
April 27, 2022 4:37 AM

Commodities were under heavy selling pressure at the beginning of the week due to demand concerns stemming from lockdowns in China. It has also weighed on global equity markets as investors are pricing in slower global growth.

Iron ore didn’t escape the volatility and it fell as much as -11% on Monday as it tracked Chinese stainless steel futures lower. However, on Tuesday the government vowed to support the economy which allowed iron ore to recoup much of Monday’s losses.

With prices hovering below a key level of resistance it could be make or break for iron ore. The market now needs to decide whether it can continue its uptrend or retrace further from its 10-month high, set earlier this month.

 

Iron ore is within an uptrend on the daily chart, although it is currently retracing against that trend. If it reverts to the bullish trendline form the November low it could be headed towards 760 – 780 (depending on how quickly it tries to get there).

On Monday prices broke beneath 883.2 support and confirmed a double top pattern. If successful, the double top projects a target around 813. However, 883.2 remains an important level to monitor as prices tried to retest it yesterday.

A break above 883.2 resistance invalidates the double top pattern. Traders could then wait to see if it is then respected as support before considering long opportunities.

 

On the hourly chart we can see yesterday’s high respected a 38.2% Fibonacci level, just below 883.2 resistance. Bullish momentum of yesterday’s rally is also softer which shows momentum is weakening, and prices are coiling up within a potential rising wedge pattern.

We are now looking for evidence of a bearish reversal pattern around (or below) nearby resistance levels. A break beneath 856 could assume bearish continuation and brings the doble top target around 813 back into focus, with support levels around 780 and 800 also making potential targets for bears.

 

 

How to trade with City Index

You can trade easily trade with City Index by using these four easy steps:

  1. Open an account, or log in if you’re already a customer 

    • Open an account in the UK
    • Open an account in Australia
    • Open an account in Singapore

  2. Search for the company you want to trade in our award-winning platform 
  3. Choose your position and size, and your stop and limit levels 
  4. Place the trade

 

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024