The Canadian Technician

What about Dr. Copper? Check the Commodity Currencies

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Copper is called Dr. Copper because it is the most sensitive to the overall economic conditions.

Copper has flashed a mess of signals this week. One week doesn't make a trend, and things always look bad on a big down week. However, this chart is building some classic signals that mean we have to watch it regularly. Within the chart I have labelled the list of bearish indicators for the Copper market health.

Copper
$COPPER

It is difficult for the commmodities to Rally when the $USD is rising. Check out the $USD Chart. Notice the $USD is above it's 200 DMA (40 WEEK MA in Black).

$USD
$USD

 

Now check out the Canadian Loonie.

Canadian Dollar

Let's look for more confirming information.


How about the Aussie Dollar. This chart is stronger than the others, but it still breaking down.

XAD

Let' check out the Russian Ruble. It is a currency that is Commodities driven.

Ruble

 

I don't have a currency chart for the Brazilian Real, But it was beaten up this week as well.

The bottom line. Copper is telling us the industrial metals are currently breaking down. The commodity based currencies are breaking as well. However bear market rallies are aggressive. I would expect the centre of the Bollinger Bands ( The 20 week MA) to provide resistance on any rally.

The beauty of technical analysis is we can see where we should change our decision. Currently, all trends are bearish. But interim rallies are aggressive as the shorts get squeezed.

 

Greg Schnell, CMT

 

Greg Schnell
About the author: , CMT, is a Senior Technical Analyst at StockCharts.com specializing in intermarket and commodities analysis. He is also the co-author of Stock Charts For Dummies (Wiley, 2018). Based in Calgary, Greg is a board member of the Canadian Society of Technical Analysts (CSTA) and the chairman of the CSTA Calgary chapter. He is an active member of both the CMT Association and the International Federation of Technical Analysts (IFTA). Learn More
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