Marshall Gittler
Trading Analysis
Copper
The dollar was unchanged against most of the other G10 currencies during the European morning Monday, as no major market-affecting indicators were released. It was slightly higher against CAD, AUD and NOK, in that order.
The Russian ruble was the main loser among the EM currencies we track, as talks between Russia and Ukraine over gas prices failed. Russian stocks were also down as OAO Gazprom, Russia’s biggest natural gas producer, slumped. Gazprom said Ukraine will only receive gas paid for in advance due to chronic non-payment of its bills.
The Polish zloty was also among today’s EM losers after seeped recordings of a conversation between NBP (National Bank of Poland) Governor Marek Belka and a minister raised concerns about Governor’s future and triggered a government crisis.
Copper edged higher after the central bank in China, the world’s biggest consumer of the metal, extended a reserve requirement cut in an attempt to support its economic growth.
Copper moved higher during the European morning, but the decline was halted by the 3.0560 (R1) barrier, near the upper boundary of the purple upward slopping channel and the 200-hour moving average. Considering that the RSI met resistance at its 70 level and moved lower, I would expect the forthcoming wave to be to the downside. However, as long as the rate remains within the purple uptrend channel, I see a positive picture and I would consider a possible decline as a pullback before the bulls prevail again.
Support: 3.0400 (S1), 3.0200 (S2), 3.0080 (S3).
Resistance: 3.0560 (R1), 3.0700 (R2), 3.0930 (R3).
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