Copper prices remained under pressure as the dollar held on to last week’s gains as the market expects the Chinese data to shed light on the global demand outlook; the largest consumer of metal.
Copper futures extended their year-to-date retreat to 717.10 in January, the lowest almost since MID d. This is due to the recovery of the US dollar, uncertain demand and rising stocks.
The US dollar strengthened sharply last week as traders continued to moderate expectations of the Federal Reserve’s easing this year, boosting the currency used to set copper benchmarks and weighing on importers’ buying power. Yesterday, however, it retreated against the euro and the yen.
In addition, demand from key customers in Asia was also in focus as China’s official PMI fell sharply and growth improved according to more general Caixin data, adding to uncertainty about the outlook for the country and copper.
Looking ahead, China’s inflation numbers will be released this week, which will have a strong impact on prices.
Technical Outlook – Copper:
Copper price turned negative from a high of 740.20 on 12/28/2023 and made a low of 717.60 yesterday, settling at 720.35. Prices, however, fall from the lowest of the day and recover somewhat.
The formation of hammer candlesticks on the chart creates the possibility of a reversal of the recent momentum. Furthermore, prices may find support around the regressive trend line at 714.20.
Thus, in the near future, copper price is expected to rise again to the immediate resistance of 725.50-730.20. Traders can buy around 718.80-719.00 with a dip.
Alternatively, on the downside, crucial support can be seen at 710.50 and a break below that could lead to a pullback to 705-698.00.
Commodity Samachar
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