Zinc prices during Thursday’s trading lost another 0.11%. The rate of the downward movement slowed, but LME zinc has already shown a 6-day losing streak. The metal’s reserves at the LME warehouses remain unchanged.
For the previous week the number of initial jobless claims in the U.S. was 228,000. This is the highest since the beginning of last December. Fears of the economic downturn caused by data on the U.S. economy continue to put pressure on zinc prices.
Industrial metal prices might be supported by China’s statistics. According to the State Administration of Taxation of China, real estate sales in January and February broke the downtrend and rose by 2.3% year-on-year. The annual growth in March was already 17.9%.
China's peak consumption season might still support the cost of zinc. At the same time, domestic refined zinc production in March was 556,800 tons. Output is expected to remain high in April. Thus, traders should be wary of risks regarding high zinc supply.
Concerns about the economic downturn caused by the statistics on the U.S. economy, as well as risks of high zinc supply have already been reflected in the price’s downward movement. However, rising real estate sales in China's peak season might support the price of the industrial metal.
The 6-day losing streak is slowing its volatility. The price is in the downtrend on the H1 hourly timeframe, approaching trend resistance.
The Stochastic Oscillator indicator (standard values) has moved out of the overbought zone, pointing to the price’s intention to rise.
The price broke out of the short downtrend on the M15 timeframe.
In addition, the support level of 2,770 on the corresponding timeframe is clearly visible.
The current volatility might form a correction in a narrow range. Support for the forming corridor is at the level of 2,770, from which there has already been a pullback that signals buying.
Signal:
The short-term outlook for zinc suggests buying.
The target is at the level of 2,860.
Part of the profit should be fixed near the level of 2,815.
Stop-loss is at the level of 2,760.
Bullish trend is of short-term nature, so it is worth to select the trading volume of not more than 2% of your balance.
This content is for informational purposes only and is not intended to be investing advice.
