Supports failed to hold; maintain short positions. The FCPO continued to extend its retracement, closing MYR66.00 lower at MYR2,643 yesterday and breaking the previous support levels of MYR2,700 and MYR2,670. The ceding of the support is an indication of a negative price signal, and reinforces our bias that the commodity is extending its retracement leg after, a brief pause between 5-7 Aug. We maintain that this correction leg is meant to correct the commodity’s previous multi-week sharp upward move. We make no change to our negative trading bias.

We advise traders to stay in short positions. We initiated these at MYR2,672, the closing level of 27 Jul. To manage risks, a stop-loss can now be set above MYR2,790.

The immediate support is revised to MYR2,600, followed by MYR2,562 – the low of 28 Jul. Moving up, the immediate resistance is now set at MYR2,685, a price point of the latest session. This is followed by MYR2,700.

Source: RHB Securities Research - 12 Aug 2020