Copper Stabilises Following Sell Off
Copper prices are looking more stable ahead of the weekend as optimism over US/China trade relations helps stem the selling we saw earlier in the week. Copper prices had been heavily sold on Wednesday following weak US and China data. Chinese manufacturing was seen falling back into contractionary territory last month, raising fears over the impact of the ongoing trade war. Following that data, US GDP was seen crashing into negative territory over Q1. Together, these data sets painted a dim picture for copper demand expectations, sending the market lower.
US/China Optimism Boosting Sentiment
Despite the weak data sets from the US and China, it seems that buyers have stepped back in over growing optimism that the two economic superpowers will soon strike a trade deal. Positive noise from both sides, including Trump’s assertion that a deal is very likely, has helped stem the selling for now. While no formal talks have yet begun, both sides are showing an openness to walking back the recent tariffs. Looking ahead, copper prices look vulnerable to a fresh push higher if we hear any further positive developments. However, it will likely take something concrete (such as formal negotiations beginning, or some tariffs being reduced) to drive copper back to highs with the risk too that if no concrete progress is seen, copper prices will drift lower again.
Technical Views
Copper
Copper prices are attempting to get back above the bull channel lows after the break down we saw earlier in the week. While 4.5785 holds as support, focus is on a fresh push higher with 5.1985 still the bull target to note. If we break current lows, however, focus turns to 4.3000 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.