Copper Spiking Higher
Copper prices are turning sharply higher mid-week with the futures market quickly approaching a retest of the current YTD highs. The move higher comes despite an intensification of the global trade war following the implementation of Trump’s tariffs against Mexico, Canada and China this week, along with subsequent retaliatory action from Canada and China.
Copper Tariffs
Trump last week ordered an investigation into the prospect of tariffs on foreign copper, aimed at boosting domestic copper production. However, the fear is that such action would put a huge strain on US copper supplies leading to a bottleneck in demand, ultimately boosting copper prices.
USD Impact
The red metal is also being helped this week by a sharp fall in the US Dollar. Trump’s tariff actions have led to a fresh surged in demand for safe-haven assets leading to a heavy fall in the Dollar. While this dynamic continues, copper prices look likely to remain supported near-term.
US Data on Watch
Looking ahead this week, traders will be watching the latest US labour market data due on Friday. Any weakness in those headline readings should further amplify USD selling near-term, creating deeper support for copper prices. Ahead of that data, traders will today receive the ADP employment reading, expected at 141k down from 183k prior. If seen, this should keep USD pressured into Friday’s data allowing copper room to push higher.
Technical Views
Copper
The correction lower in copper has found strong support into the 4.5785 level with the market now turning sharply higher again and quickly approaching a retest of the YTD highs around 4.8010. With momentum studies turning higher, focus is on a breakout here and a continuation towards 5.12 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.