Having fallen back beneath 19c yesterday Jul’22 found some initial buying versus physical activity which lifted the price marginally to the 18.90 area during early trading. Once any hedges had been covered there was no continuing interest however and so a drop back towards 18.80 left the market meandering a few points lower for most of the morning, supported by consumer scales in the thin conditions. While the macro has remained quietly steady the recent movements have possibly been linked to the fundamental picture which remains far less supportive than the technical outlook, and as specs have stepped away again so the market has struggled more. This became increasingly apparent during the afternoon as a further easing to new recent lows drew out spec long liquidation which sent prices further into the scale buying and resulted in Jul’22 lows at 18.59 during the final hour. These lowest levels since mid-March now leave us looking toward the lows at 18.50/18.44 for support, a break of which could be the catalyst for further liquidation of out of the money spec longs that could see a 17 handle in quick time with something of a vacuum in place where we saw the sharp early March rally. MOC buying ensured a settlement at 18.62 though focus will remain on the aforementioned 18.50/18.44 support for the near term to see whether the market can gather itself once more.
