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December High Grade Copper futures are trading lower despite a weaker-than-expected U.S. retail sales report and a falling U.S. Dollar.
After Thursday’s break through 3.2200 reaffirmed the downtrend, the market broke sharply into a major retracement zone at 3.2343 to 3.1840. In addition, the market took out an uptrending Gann angle at 3.2135. This puts copper in a position to challenge the next Gann angle at 3.1335.
Daily December High Grade CopperAlthough downside momentum is building, the prolonged move in price and time has the market ripe for a closing price reversal bottom. In addition, traders may be looking to pare positions later in the day as they prepare for next week’s U.S. Federal Reserve meeting.
Next week, the Fed will decide how much to reduce its monthly monetary stimulus. Interest rates may rise after the decision, leading to a stronger dollar. This could hurt dollar-denominated copper further because it may reduce demand from foreign investors.
Traders should look for a sideways-to-lower trade early in the session, but may mount a turnaround into the close.
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