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China Fears Hit Copper Sentiment
Copper prices are trading at their lowest level since April today as the metal remains under pressure over rising demand concerns around Chinese demand. A recent string of weak data out of China has put fresh focus on downturn risks. Last week, it was hoped that a top-level government meeting would result in fresh stimulus measures being announced to help buffer the economy. However, with the meeting passing without any fresh stimulus announcements, sentiment remains weak and copper has continued to sell-off as demand forecasts get scaled back further. Industrial data has been softening over recent months while inventories data has been rising, reflecting weakening demand.
Trump Impact
Fears around the impact of a Trump presidency are also hitting copper sentiment this week. With expectations of a stronger USD if Trump wins and a return to protectionist trade policies, demand forecasts for copper are coming under greater pressure. Near-term expectations of Fed easing should help offer some support, curtailing USD strength.
US Data On Watch
Looking ahead this week, traders will be watching the next round of US data including advance GDP on Thursday and core PCE on Friday. If we see fresh data weakness, this should push the focus back towards Fed easing expectations, weighing on USD and allowing copper and other commodities room to recover.
Technical Views
Copper
The failure at the retest of the underside of the broken bull channel and the 4.5785 level has seen the market turning sharply lower. Price has now broken down beneath the 4.3000 level and with momentum studies bearish, focus is on a continuation lower and a test of 3.9350 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.