Copper Rally Pauses But Bullish Outlook Remains Strong
Copper Stalls at Resistance
The rally in copper has stalled today as traders take a breath following an impressive rally over the first part of the week. Risk assets have been in strong demand since the start of the week as optimism around US/Iran peace talks continues to drive the action. Oil prices have cooled sharply, taking USD lower with them, while riving a wave of risk-on market action. Copper futures have surged higher by more than 6% this week, now up around 11% off the month’s lows as the Iran war de-scalation trade gains momentum.
Bullish Outlook
Near-term, copper prices should continue to find support while the news back drop remains supportive. On that front, any headlines showing that talks have restarted (or will restart imminently) should act as a catalyst for fresh upside near-term. However, if talks stumble again or their resumption is delayed this could see recent price moves reversing. Traders will also be watching headlines around the Strait of Hormuz with Trump’s blockade still in action and the risk of tensions boiling over there leading to fresh military action. However, while military risks remain subdued and focus is on continued negotiations, USD should continue to move lower in line with energy prices signalling a bullish outlook for copper prices through the rest of the week.
Technical Views
Copper
The rally in copper has seen the market pushing firmly back above the bull trend line with price now testing the 6.1090 resistance level. Momentum studies remain bullish here suggesting risks of a fresh break higher while price holds above the 5.8550 level and bull trend line. Above, 6.2845 is the next bull target ahead of the record highs around 6.5830.
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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.