Chart of the day: Awesome iron ore
Price action in Dalian iron ore futures this year has been powerful and technically very interesting. Since December’s break above very long-term resistance at about 570 yuan (US$82.85) per tonne, it has been thrashing around in big weekly and monthly ranges, confirming the tussle between bulls and bears that has been playing out. Positive momentum appears to have won, rallying this week to its highest level in almost three years. Support was provided by what had been resistance at the 26-week moving average and 38 per cent Fibonacci retracement. This now provides a springboard for further gains with our original target at 840 yuan still favoured, and an extension to 985 yuan is a possibility if enough upside pressure builds.
Nicole Elliott is a technical analyst