USD/TRY jumped above the psychologically important 8.00 figure on Monday, and despite the currency pair looking a bit stretched, another run towards 8.50 appears to be just a matter of time. The Daily RSI is not signaling overbought conditions yet, and as long as the 200 DMA remains intact, TRY bears are clearly having the upper hand.
Copper had a phenomenal run in past 12 months, with the price of the commodity roughly doubling from the March 2020 low. Inflations fears have been fueling bullish bets in the commodities sector, and rising growth expectations have lifted risk appetite.
Some investors are anticipating the next commodity supercycle. A strong economic recovery in China after the GFC led to a massive Copper rally that lasted from 2009 to 2011. However, things are different this time. While China did manage to bounce back from the COVID-19 crisis quicker than any other major economy, China´s monetary policy is shifting more towards tightening and the strong Yuan is another issue.
From a technical perspective, traders will be keeping a close eye on the $3.85 support level, followed by the rising trendline from the March 2020 low and the 200 DMA around $2.90. The RSI is still signaling overbought conditions and that Copper might be due for a pullback.
While Wall Street recently celebrated another record high, Chinese markets have found themselves in subdued mood. Concerns about policy tightening and lofty valuations have led to a sell-off in early February, which has dragged the CN50 back below 17.000 points. The charts are hinting at a continued period of consolidation in the near-term, with the 200 DMA in focus, as well as the 50 % Fibo of the April 20 - January 21 rally around 16.040 points.
The information is not to be construed as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product, or instrument; or to participate in any trading strategy. Readers should seek their own advice. Reproduction or redistribution of this information is not permitted.
With all eyes on the FOMC where no rate change is expected, traders and investors consider what the Fed’s stance will mean for markets