Maintain short positions as the immediate support comes under pressure. The FCPO traded between MYR2,313 and MYR2,358 yesterday, before closing MYR27 lower at MYR2,341. The negative session indicates that the commodity’s retracement phase is still in effect, following the recent price rejection from the 200-day SMA line. Towards the downside, we expect – at the minimum – the MYR2,294 support level to be tested. This correction set in after the FCPO’s multi-week rebound occurred – this happened between early May and the third week of Jun. Premised on this, we are maintaining our negative trading bias.

With risks tilted towards the downside, we recommend that traders remain in short positions. We initiated these at MYR2,395, the closing level of 25 Jun. To manage risks, a stop-loss can now be placed above MYR2,435.

The immediate support is revised to MYR2,313, the latest low. This is followed by MYR2,294, the low of 15 Jun. Meanwhile, the immediate resistance set at MYR2,400 – followed by MYR2,435, the low of 24 Jun.

Source: RHB Securities Research - 6 Jul 2020