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FxWirePro: Despite recent rise, risk and outlook remain to downside for copper

In the previous article, named, “FxWirePro: Sell copper at correction targeting $2.15 per pound”, available at http://www.econotimes.com/, we recommended going short on copper at the then current rate of $2.5 per pound and at rallies up to $2.65 per pound with a target around $2.15 per pound. Despite the recent rise in the copper price we maintain the current outlook of selling copper as the risks are clearly tilted to the downside. The risk of a slowdown in demand from China is simply enormous, which can’t be mitigated by an increase in demand from the United States under Trump administration due to increased infrastructure spending. In addition to that, the recent wars of words indicate there could be a stormy relationship between the US and China under Trump administration, which could hurt latters exports to the former, leading to further slowdown copper demand.

Trade idea:

We continue to recommend adding short side positions and suspect the selloffs to begin from $2.67 area. Stop loss remains above $2.71 per pound.

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