Copper Rebound Rolls On Following FOMC
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Coppr Higher Despite Fed Hike
Copper prices continue to push higher on Thursday as the rebound in the metal gathers pace. The rally comes despite the rally in USD on the back of the Fed hiking rates yesterday and signalling further tightening to come. Given that fresh rate hike from the Fed the rally shows how much focus the market is placing on broader copper supply tightness. Dwindling supply from leading global copper producer Chile has been a big theme in copper trading this year and with output levels still heavily lower, the bullish outlook remains in copper.
US Tariff Uncertainty
Another big theme behind copper trading this year has been the ramp up in demand we’ve seen ahead of anticipated US tariffs. However, copper prices were seen plunging earlier in the week in response to news stories doing the rounds suggesting that the US administration had delayed its decision on the tariffs and might ultimately not follow through. For now, traders are waiting greater clarity on that and some confirmation from officials on the status of the tariffs. Looking ahead, news around the tariffs will be key: If the US govt confirms its decision has been delayed, this could lead to further losses near-term. However, if it revives the prospects of tariffs being actioned near-term, this should help catapult copper prices higher again.
Technical Views
Copper
The sell off in copper futures has stalled for now ahead of the 6.2845 level which remains intact as support. Price is now rebounding and retesting the broken bull trend line and the 6.5830 level. If bulls can get back above here, 6.7190 will be the next resistance to note. We’ve seen a lot of congested price action around current levels this year so risks of further ranging activity (rotation lower) are high
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.