Explosive Moves in Copper
Volatile Price Action
Copper prices are on watch ahead of the weekend following a heavy reversal lower from the all-time highs printed yesterday. The futures market hit highs of 6.5850 before sharply reversing 10% lower. The move has been linked to profit taking as price tested the 6.5000 level as well as a rebound in USD. Volatility in copper prices recently suggests the return of speculative buyers after the washout in mid-January as China launched a crackdown on HFT. Prices quickly recoiled as China sought to dampen speculative trading activity there. However, with a spike across China’s exchanged seen yesterday into that push higher, it’s likely that these traders have returned, quickly booking profits on the move, leading to the sharp reversal.
Fed Chair News Due
Traders will be keeping an eye on USD today with the Dollar currently rallying head of anticipated news that Trump will announce the new Fed chair pick. Kevin Warsh is expected to be announced today, with USD rallying given his reputation as a hawk. If USD continues to push higher, this could see copper prices retreating deeper near-term. Global risk flows are also on watch following news of fresh Trump tariffs against countries supplying oil to Cuba and threats of further tariffs on Canada. If Trump does pursue a fresh tariff agenda this will weigh sharply on global copper demand expectations, leading pries lower near-term.
Technical Views
Copper
The reversal in copper has seen the market trading back below the 6.1090 level with price currently bouncing off the bull channel lows. While price holds above the 5.8550 level, focus is on a continuation higher. Below there, a test of deeper support at 5.4415 can be seen next.
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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.