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Copper Hits Targets 1 & 2 – CADCHF Reverses

Market Analysis
2016-10-14_15-06-27

Copper, Daily               

The Copper post from October 6 hit both Target 1 and Target 2 yesterday on a strong down candle. The trade was out of the money for five of the six trading days it was active. It’s a good example of why it’s important to allow trades time to develop and find their own way. So long as a trade reaches its target it should not really matter when this occurs. The total move from entry at 2.1555 to target 2 (2.1170) was 385 ticks. Copper is traded in 5 tick lots so the real net gain was 77 ticks. Yesterday’s move down took Copper below the 50 and 200 DMA and all three of the recent Fibonacci levels following the September low.

Fundamentally, Copper is in a strong bear market that has been in place for some six years and although September provided further consolidation and a bounce from the floor at 2.0640, the longer term view remains negative. A significant upturn in demand (particularly from China) and the rhetoric from the USA, Europe and the UK regarding infrastructure expenditure would need to be implemented and sustained before copper breaks this long term downtrend.

This week’s CADCHF post (October 10) was rather short lived and closed for a 55 pip loss, as the pair broke the 50 DMA on Tuesday (October 11).

 

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Stuart Cowell

Market Analyst

HotForex

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