Market Insight Copper Climbing

Miners in focus as copper keeps climbing

For the most part overnight trading has been typical for a US holiday. Stocks have been relatively steady with the Nikkei up 0.9%, the Dax up 0.1% and the FTSE down 0.3%. WTI and Brent crude oil are up 0.2%.

Currency markets have remained active overnight as the reaction of Wednesday’s big data driven breakout in USD continued to work its way through world markets. The greenback extended its gains overnight but into the morning the bulls have relented a bit. This has enabled gold to stabilise at a lower level while CAD, JPY, EUR and GBP have been able to recover slightly. Japanese flash manufacturing was slightly below expectations, German GDP was in-line and the German IFO business survey was mixed.

The big star overnight has been copper which has resumed its uptrend in a big way with its recent correction over. This action indicates traders are expecting an upturn in demand for materials moving forward. This could keep a tailwind behind mining stocks.

It’s common on days when the US ‎is closed and Canada is open for the Canadian market to trade slightly higher on light volumes. Today the focus may remain on resource sectors between the copper rally and gold plunge of the last 24 hours plus speculation in the oil sector ahead of next week’s big OPEC meeting.

Chart Signals: Copper and USD rallies continue but overextended RSIs send warning signals

World markets have paused for the most part today with US markets closed for a holiday on holiday. The big Trump driven rallies on USD and copper continue but RSIs are showing really overbought and oversold conditions and the potential for a swift and sharp trading correction at some point, but likely not until next week at least after everyone’s back.

North American and European Indices

US 30 is closed for US Thanksgiving

US NDAQ 100 is closed for US Thanksgiving

US SPX 500 is closed for US Thanksgiving

UK 100 is still trading sideways in a 6,700 to 6,925 channel, recently trading near 6,805 as it bounces around between 6,770 and 6,880.

Germany 30 remains in a sideways trend, currently bouncing around between 10,590 and 10,750 recently trading near 10,670.

Commodities

Gold has stabilized in the $1,180 to $1,190 area, licking its wounds after being pounded down through $1,211 and $1,200 on Wednesday.

Crude Oil WTI has paused near $47.50 and its 50-day average trading between $46.80 and $47.80 while consolidating a recent upswing.

Copper is accelerating to the upside again, retaking $2.60 and rallying toward $2.66 with next resistance possible between the $2.70 round number and the recent peak near $2.73. RSI really overbought and a possible negative divergence suggest potential for a correction at some point.  

FX

US Dollar Index peeked up above 102.00 briefly and has settled back toward 101.90 with more support near 101.60 then 101.00. RSI extremely overbought and a double top suggest potential for a trading correction at some point.

USDJPY keeps on climbing, blasting off from 112.45 a Fibonacci level through 113.00 and on toward 113.50 before settling back toward 113.20. RSI indicates upward momentum still increasing but is really overbought raising the risk of a snap downward correction at some point.

EURUSD continues to hold above the $1.0500 round number, trading in the $1.0520 to $1.5080 area consolidating recent losses and trying to work off an oversold RSI. Next potential resistance on a bounce near $1.0645.

EURGBP remains in a downtrend falling from near 0.8570 toward a test of 0.8460 Fibonacci support with resistance dropping toward the 0.8500 round number and next support near 0.8300 a previous low.

GBPUSD is climbing within a $1.2380 to $1.2500 trading range recently near $1.2440. Initial support near $1.2400 with initial resistance near $1.2470.

USDCAD remains in an uptrend advancing from $1.3430 higher support into the $1.3490 to $1.35630 area around the $1.3500 round number and below $1.3565 Fibonacci resistance. RSI holding 50 confirms underlying accumulation intact.

CADUSD continues to stabilize in the $0.7380 to 0.7475 area recently trading near $0.7410 a Fibonacci level. RSI stuck below 50 indicates his as a pause within a broader downtrend.

 

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