Copper, Russell 2000, DXY and USD/MXN Forecast – Wide Range of Markets Moving Today

Copper Technical Analysis

The first chart in front of you is copper. You may ask why copper? Well, it’s because it’s not silver and it’s not gold. What I mean by that is that it does tend to move in the same overall direction and certainly has recently, but it’s also not as volatile. This, for me, is a safer way to play the metals market at the moment because, quite frankly, we’ve seen silver plunge to just above $70 only to bounce again to around $84 at the moment after that horrific sell-off on Friday.

You’ll notice copper, although it did sell off pretty viciously on Friday, it wasn’t quite as dramatic as silver. That’s because copper has an actual use beyond whatever the story is with silver right now. Copper is used in AI data centers, but it’s used in multiple other things as well. So, it tends to be more of a supply and demand situation. $5.50 being broken to the downside probably means silver is at $70 or probably below it, and it’s time to step away from metals. I like buying short-term dips. If we can clear $6.00 that’s a good sign and at that point, I might go looking at silver.

Russell 2000 Technical Analysis

The Russell 2000 is very important to me today because we’re sitting just above the 50-day EMA and the crucial 2600 level. This is an index of the much smaller companies in the United States and generally speaking if this rises, the other indices will as well. So even if you don’t trade the Russell 2000, keep an eye on this today because the buy on the dip sentiment probably is good for the Nasdaq 100, the S&P 500, etc. I do like this index. I think it could go to 2700 over the next couple of weeks. Keep in mind we have the jobs number later this week so that will slow the stock market in America down quite a bit.

U.S. Dollar Index Technical Analysis

The U.S. Dollar Index, we have to pay attention to this because we just cleared the 97 level and it does look like we’re trying to recover. If we continue to grind higher, I won’t trade U.S. Dollar Index futures, I’ll probably short certain currencies like the New Zealand dollar or maybe the Japanese yen, some of the weaker currencies. Watch the DXY because if we continue and break above this gap here at 97.46, that’s a really good sign for the greenback and I think we would just re-enter this consolidation range.

USD/MXN Technical Analysis

The U.S. dollar against the Mexican peso, ironically, I think the exact opposite of that. This is a market that tends to move with the U.S. dollar and the U.S. economy strength being in opposite directions. What I mean by this is that Mexico is the largest exporter to the United States and pays a higher interest rate. So, if things are good in America, they’re buying Mexican products, and of course, you’re collecting swaps to short this market. I like the price action for the day. I’m probably going to end up being short of this pair for perhaps a drive down to the 17 pesos level.

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