Chart of the day: Outlook for Shanghai steel shines
Continuing with our positive outlook for Shanghai steel rebar futures, despite their lengthy struggle with Fibonacci 61 per cent retracement resistance at 3,972 yuan (US$590.60) per tonne and the psychological 4,000 yuan per tonne, we are watching for a weekly close above here. All aspects of the weekly Ichimoku cloud chart system are bullish, especially the large cloud itself, and hopefully the lagging line will get a lift from the top of the triangle pattern. The next area of resistance will be about 4,500 to 4,625 yuan in the event of a strong close this week and, based on the height of the large right-angled triangle, a squeeze to 4,900 to 5,000 yuan cannot be ruled out. Open interest has risen sharply this year, meaning this move matters to many.
Nicole Elliott is a technical analyst