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Bearish Sign for Copper: Prices Enter Descending Channel

April 5, 2015 at 22:32 by Vladimir Vyun

The present chart shows prices for copper in the 4-hour timeframe. It is clear that the commodity has entered a descending channel — a very bearish sign. The current chart looks similar to the last week’s chart for soybeans. The yellow lines show the channel, the cyan line indicates the entry level for long positions in case of an upside breakout while green line suggests the target for taking profit.

Fundamentally, copper has been supported by speculations about possible stimulating measures in China — the world’s biggest consumer of the industrial metal. The chart clearly shows that prices were rising till the end of May but entered the descending channel afterward. There could be couple of reasons for the decline, not the least of them has been the strong dollar. Despite the bearishness of the present chart, a bullish breakout is very possible (as it has happened to soybeans) as stimulus in China remains a supportive factor for the metal while the US currency weakened recently, easing the pressure on commodities.

Click the image to enlarge it to a full-size screenshot:



You can download the MetaTrader 4 chart template for this pattern.

If you have any questions or comments regarding this chart pattern for copper, please feel free to reply below.

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