fb#C-COPPER Price Forecast | Copper technical setup bearish despite positive data | IFCM

Technical Analysis #C-COPPER : 2020-08-05

Recommendation for Copper :

Sell
Strong SellSellNeutralBuyStrong Buy

Below 2.839

Sell Stop

Above 2.9551

Stop Loss

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Senior Analytical Expert
Articles 1591
IndicatorValueSignal
RSI Neutral
MACD Sell
Donchian Channel Sell
MA(200) Buy
Fractals Sell
Parabolic SAR Sell

Chart Analysis

IFC Markets Tech Analysis

On the daily timeframe #C-COPPER: D1 is declining above the 200-day moving average MA(200), which has leveled off. We believe the bearish momentum will continue as the price breaches below the lower Donchian boundary at 2.8390. A pending order to sell can be placed below that level. The stop loss can be placed above 2.9551. After placing the order, the stop loss is to be moved every day to the next fractal high, following Parabolic signals. Thus, we are changing the expected profit/loss ratio to the breakeven point. If the price meets the stop loss level without reaching the order, we recommend cancelling the order: the market has undergone internal changes which were not taken into account.

Fundamental Analysis

Data from China and US were positive recently. Will however the COPPER continue declining?

While technical setup is bearish for copper, recent data from China and US painted a picture of recovery in economic activities in both countries. Thus, both manufacturing and services sectors continued expanding in China in July according to Caixin PMI reports (though services expansion slowed). And in US the manufacturing sector grew in July as evidenced by the Institute for Supply Management Purchasing Managers' Index, and US factory orders rose 6.2% over month in June to mark the second increase in a row. The rebounding of economic activity after coronavirus shutdowns is an upside risk for copper price.

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