On April 26th, Hujiao opened slightly higher but quickly faced a sharp pullback. The main 1309 contract closed at 19,215 yuan per ton, gaining 150 yuan. On the previous day (April 25), rubber continued its steady recovery, opening higher on Thursday but gradually declining during the session. As the holiday season approached, many traders who had taken short-term profits exited the market, focusing more on afternoon movements.
The Tokyo Industrial Exchange (TOCOM) rubber index rose for the second consecutive trading day on Thursday, reaching a one-week high. This was driven by the yen’s strength against the dollar, hovering around 100 yen, and positive expectations regarding demand. The TOCOM October contract settled at 259.1 yen per kilogram, up 0.8%. Meanwhile, the Chinese market saw positive repurchase activity overnight, ending a nine-week streak of reverse repurchases. The Bank of Japan reiterated its 2% inflation target, while positive economic growth forecasts from Germany and other global developments contributed to a strong external market performance.
Domestic markets in China mostly followed the upward trend from overseas, opening sharply higher. However, the momentum soon reversed, with prices fluctuating significantly. It appeared that the current rally was an oversold bounce, with short-term profit-taking playing a major role. The spread between the highest and lowest points of Hujiao reached over 500 points, indicating increased volatility.
In the early stages of the trading session, Hujiao struggled to break above 23,000. The midline before the holiday closure saw a full reversal as traders took profits ahead of the weekend. The current downturn in Hujiao has been largely influenced by macroeconomic data, with the key resistance level at 20,000 yuan per ton. As May approaches, the probability of a rebound in Hujiao is considered higher, and it's advisable not to maintain excessive short positions. Investors should monitor the market closely and consider strategic entries based on technical indicators and broader economic trends.
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