FxWirePro: Bulls and Bears continue to fight in copper (call review)

Copper is once more defying the gravity and heading for another test of the key resistance around $2.3 per pound. As of now, a bearish call from our side remains active in copper. We recommended selling copper at $2.06 per pound with a stop loss around $2.3 per pound (later moved to $2.4 per pound) with targets around $1.7 and $1.57 area.

However, this call of ours has been more like our call in franc (almost a year ago, we called to short franc against the dollar), which has continued to consolidate within a tight range of supports and resistances. Similarly, the bulls and bears have been fighting hard to win the direction in copper and none of them have succeeded yet to make a decisive turn.

Our arguments for the weakness in copper were the weakness in China’s economy, hence the demand of copper and a strong dollar, along with continued large production. While the dollar and the production have been supportive to our bearish call in copper, China’s economy has somewhat improved, partially due to weakness in the yuan.

We are not withdrawing the call yet but would increase the vigilance surrounding it. The copper is currently trading at $2.246 per pound.