During the day on Tuesday, we went back and forth in the copper markets, which of course is one of my favorite markets to determine on how the global economy is functioning. After all, this is a commodity that tends to give us an idea of how construction is going around the world. This is especially true in the Asian markets, as there is quite a bit of growth in that part of the world when things are strong. However, you can see that the copper markets have fallen quite a bit over the last couple of months, but we did see a bit of a break above the top of the hammer from the previous session. If we can break above the top of the consolidation area, it’s likely that the market will continue to the next technical region which I see as the $2.15 handle.
Nickel increments
Markets tend to move from one nickel to the next, and as a result I feel that it’s only a matter of time before we break higher, perhaps reaching towards the $2.15 level next, and then to the $2.20 level after that. Pullbacks from this area could see quite a bit of support all the way down to the $2.07 level below, and then most certainly the $2.05 level under that. I believe that this market is ready to bounce, but I believe that the market will struggle to get above the $2.15 level as construction in Asia has been lackluster at best.
Keep an eye on this market, it does have an influence on the Australian dollar, but it also has an influence on Asian indices as well, such as the Hang Seng and the Nikkei. In other words, this is a great barometer for not only the Australian dollar, but Asian markets overall. It’s also a very good barometer of risk appetite.
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