InvestingScope

Copper: Complete Trading Plan | H&S vs Channel Up

OANDA:XCUUSD   CFDs on Copper (US$ / lb)
Copper ( XCUUSD ) has been trading inside a 1W Channel Up ( RSI = 59.467, MACD = 0.018, ADX = 36.505, Highs/Lows = 0.0586) which touched the Higher High trend line at the end of December. Right now the price is pulling back towards the 1D MA50 (blue trend line ) to price a Higher Low.

As long as 2.8500 holds, which is the 1M Symmetrical Resistance, then the Channel Up will most likely price that Higher Low just below the 1D MA50 at 2.7000. With Copper trading on a Head and Shoulders since July 2018, if the Channel Up Higher Low trend line breaks, there are greater chances to re-test the neckline's Support within 2.5500 - 2.5270.

On the other hand, if the 2.8500 Symmetrical Resistance breaks, then that long term Head and Shoulders pattern gets invalidated and we will focus purely on the 1D Channel Up which should set eyes on the 2.9900 Resistance of the Head. In that case (if 2.8500 breaks) we will be switching to a buy with 2.9500 as the Target.

*Note at this point that the (otherwise bullish ) Golden Cross formation on the 1D chart has been a bearish signal on the last 2 occasions for Copper since June 2018. On December 27th, 2019 we just formed a new Golden Cross.

See how the Head and Shoulders has provided an excellent buy signal last August:




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