Copper Or Aussie, Which One Is Telling The Truth?

FX:COPPER   Copper
190 0 8
As Australia is a main exporter of Copper             , there is a strong correlation between the metal and AUDUSD             rate. Recently, there has been an ongoing divergence between these 2 instruments which usually move in tandem. While Aussie has been registering higher highs and higher lows, Copper             has become under sever selling pressure and its August lows have been breached.

This inter-market divergence warns that something is wrong which should be corrected soon. Taking into account the massive bullish Deep Crab pattern formed on Copper             chart, my bet is that it is the Aussie that is correct in signaling an end to a multi-month route in commodities .

In any case, on 25th to 27th of November, there will be extreme volatility in the markets and many questions will be answered.

Stay tuned and beware!

Ali Sharif Azadeh, CFTe
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