![]() ![]() ![]() The same setup is also observed on the Micro Copper contract, which offers greater flexibility and precision in execution.Ĭopper’s interesting relationships with major currencies and commodities, allow us to analyze it from multiple angles. On a shorter timeframe, we see a descending wedge pattern forming, which is generally considered a reversal pattern. Previous attempts to break this support in July and September were both rejected. Looking at the price charts, we see copper trading near the significant long-term support level of 3.3. With signs of the ratio retracing off the upper range, have we marked the end of this move? And is it time for copper to gain some ground against gold? The ratio’s recent high can be attributed to copper weakness compared with gold. Thirdly, the Gold/Copper ratio generally trades within a pretty defined range, with out-of-range moves happening during major market events. The recent weakness in the Yuan has led copper prices lower, but with the CNYUSD pair seemingly recovering now, could some strength in the Yuan lead the copper rally? Secondly, copper prices and the Chinese Yuan have a relatively high correlation as China is the world’s largest buyer of the metal, and by a significant margin. With the calendar spread making a significant move higher now, is this what they call déjà vu? In February 2022, we observed the copper calendar spread making a significant move lower, with the outright prices following suit in April. Copper calendar spread tend to move in-line with its outright prices, until major turning points, when the calendar spread leads the outright price movement. 7 3 8 8 Copper’s many tangos In the following charts below, we will highlight why copper looks interesting to us right now.įirstly, the Copper Outright prices (orange) vs the Calendar spread (black). ![]()
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