Copper moves lower
The dollar was generally firm at midday in Europe. The main mover was the pound, which was quite volatile. It rose slightly in the morning in anticipation that the minutes of the Bank of England’s November Monetary Policy Committee meeting would show a hawkish tilt to opinion on the committee, then fell sharply when on the contrary the minutes showed continuing concern about the fragile economy. But, the move didn’t last long and within an hour the GBP/USD was back above where it was before the minutes came out. The rebound demonstrates to me the strength of the market’s conviction in the UK recovery. Market participants looking for a way to play the GBP strength should consider the GBP/JPY, in my view.
Copper escaped from a falling wedge formation, but after hitting the resistance of 3.1786 (R1) moved lower. The signals provided at the moment are not encouraging enough to declare a newborn uptrend. Firstly, we need to observe a rebound at the lower boundary of the short-term blue channel, and secondly the price should overcome the key resistance of 3.1786 (R1), in order to expect further advances. A violation of that resistance gives room to the bulls to drive the action higher, since the next important barrier is found at 3.2250 (R2). Both momentum studies confirm the recent weakness of the metal. The RSI moved lower after finding resistance near its 70 level, while the MACD, despite its positive reading, crossed below its trigger line.
Support: 3.1515 (S1), 3.1272 (S2), 3.1000 (S3)
Resistance: 3.1786 (R1), 3.2250 (R2), 3.2744 (R3)
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