2017 seem to be the year of commodities comeback with the economy growth and inflation showing signs of returning and Trump protectionism speech seem set to stop USD strength. History has a clear view on soft interventions like this and they usually point down for USD (1987 plaza accord comes to mind). Furthermore, EM would benefit greatly of a weaker USD and China cutting oversupply in coal (up more than 130% in 2016) and now seem to follow through on copper consumption and cutting aluminum oversupply. This all also holds promising signs for gold the leader of the commodity space. Having said that "doctor copper" is the life pulse on the economy. If half what we are hearing about infrastructure projects etc. commodities and specifically copper are set to be a winner in 2017. Technically 50/200 moving average have already decided on top price action. It says up. Confirmed by rounding bottom and the decisive breaking of a downwards trend. Entry point somewhat tricky - sitting at 2.75 resistance could fall as far as 2.50. Binomial option in place in other words - providing two scenarios - buy dip (2.50) or buy breakout of 2.75 - whichever comes first in other words.
Comment:
Breakout finally happend. Follow Chinese news on more cuts on commodities and USD for more excitement. Dr. Copper might just be the bearer of more good economic news.This will during the next 36 months easily hit 4.75. In other words a continues long trade...
Comment:
Bad breakout yesterday - seem like we are due for an overall correction. DXY higher still if it is doing the Plaza accord move 87(2nd peak 2000-01) it will fulfill 112-115 on top before petering out. Negative for commodities and credit cycle potentially taking a pause atm.
Comment:
Downside target 2.4185