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Copper Under Pressure
Copper prices remain under pressure today, despite the lift in Chinese stocks on the back of weak China data overnight. CPI and PPI were both seen falling again in the world’s second largest economy last month. The data adds to fears that the Chinese economy is deteriorating and has prompted speculation of further Chinese stimulus to come. However, while these expectations have boosted stock prices, copper prices remain in the doldrums today.
Deeper Stimulus Needed
Given the situation in China, the sense here is that unless the government announce a widespread fiscal stimulus package, measures aimed at reviving the stock market will simply feed into speculator profits and won’t translate into better demand, providing short-lived positive effects.
Fed & Copper
Along with concerns over the health of the Chinese economy, a stronger US Dollar has also added downside pressure to copper prices. The Fed continues to push back against near-term rate-cut calls and with US data remaining strong, traders are now scaling back their easing projections accordingly. While the Dollar continues higher, copper prices look vulnerable to further downside near-term. Should US data start to weaken, however, or the market get more of a signal that US rate cuts are coming soon, this should help drive copper prices higher.
Technical Views
Copper
The latest test of the 3.9410 range highs has seen the copper market reversing lower once again. Price is now testing range support at 3.7370, with the broken bear trend line just below. A break below here will open the way for a move down to the deeper 3.5475 level support, in line with bearish momentum studies readings.
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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.