Copper prices fell nearly half a percent in early September on rising inventories and softening Chinese demand in thin volumes as U.S. markets closed for Labor Day.
Conversely, the dollar remains steady as traders prepare for a jobs report that could influence the Fed’s decision on the size of a rate cut in September. Meanwhile, investors weighed the prospect of lower US interest rates and strong consumer demand in China.
Copper stocks in LME warehouses rose by 8,700 tonnes due to market weakness.
One-month earnings on Wednesday were due to concerns about demand from major Chinese buyers and a stronger U.S. dollar weighing on consumer spending and manufacturers.
He said weak Chinese factory output and low confidence in the country’s economic sector could reverse the rise from last month.
On the demand side, Australian mining giant BHP recently cut its forecast for Chinese copper demand amid concerns about the country’s economic recovery.
Official data also showed that manufacturing activity in China contracted further in August, although a private survey revealed that the manufacturing sector returned to growth and expanded more than expected last month.
Elsewhere, copper prices faced pressure from a stronger dollar as a steady reading in US PCE inflation prompted traders to pare bets on aggressive Federal Reserve rate cuts.
A strong recovery in the dollar was also depressing metals prices, with month-end buying lifting the greenback from a one-year low as traders awaited economic data that could set the tone for the U.S. Federal Reserve’s September policy meeting.
Today, US Manufacturing PMI data is scheduled to released. An higher than forecasted readings is expect to support copper prices in a near future.
Technical Outlook : Copper Futures
Copper prices made a low 798.20 yesterday and settled at 801.40 compared to the previous day’s close of 806.50, posted nearly half percent intraday fall.
The intraday price action resulted in a formation of an inverted hammer candle stick which is indicating for a momentum reversal in a near future.
On the upside, fresh buy is expected to initiate above 802.90 for upside target 807.50-809.80.
On the downside, a break below 797.80 is expect to extend fall towards 792.50-790.80
Happy trading!
Commodity Samachar Securities
We Decode the language of the market
Also Read: Economic News: US ISM & German Retail PMI in Focus Today Nifty’s Record-Breaking Run: A Look at the Driving Forces
Recommended Read: Put-Call Ratio: How Does It Influence The Trader Mindset?
Want help on your Trade?
Chat with RM