FxWirePro: Bearish Doji challenges bulls at key resistance in Copper

Bearish Doji weighs,

• The price of red metal is struggling today as copper trades at $2.924 area, down 0.3 percent for the day.
• Yesterday’s price action in the CFD (contract for difference) clearly indicated that the bulls would struggle as the price formed an inverted bearish Doji.
• The chart clearly shows that the copper has been struggling to clear resistance around $2.96 area since February.  We have long suggested that the price of copper would fall to as low as $2.75 in the medium term, as a slowdown in demand from China, the world’s biggest consumer would outweigh other factors.
• Hence, we would continue with our recommendation to go short on Copper. However, there is a risk to this outlook and that is the optimism drive from a Sino-American trade agreement.  Our model on that suggests that the agreement could push copper to as high as $3.07 per pound in Comex. But it still won’t change the longer horizon bearish outlook.

Trade idea:

• Maintain short positions in Copper with a stop loss around $2.97 and an initial target of $2.85 per pound.