Copper Rally Continues Despite US Rejecting Iran Peace Proposal
Copper Higher Again
Copper prices are pushing firmly higher again this week extending the bull run from last week where copper futures advanced more than 8%. Risk appetite remains strong this week, keeping commodities prices underpinned, despite no developments in the US/Iran peace process. Sentiment was strengthened last week by an easing of tensions and positive signals from both sides, leading to speculation that a dela could be on the way ahead of a scheduled meeting between Trump and Xi later this week. However, after Trump rejected the latest peace proposal from Iran, the standoff remains and with neither side willing to concede on key points, a breakthrough seems unlikely.
Risk-On Supporting Copper
Nonetheless, it seems risk markets are cheering the continued ceasefire, strengthening the view that neither side particularly wants to restart the war on a fuller scale. While the ceasefire holds copper prices should remain supported with any positive headlines around the Trump/Xi meeting likely to further strengthen risk appetite. However, there are some bearish risks ahead this week given the slew of US data and Fed speak we have. US CPI in particular is expected to jump to 3.7% from 3.3% last month. If confirmed, this could lead to some upside action in USD as hawkish Fed expectations become more entrenched, blunting risk appetite. Additionally, any further hawkish data (PPI and retail sales due) along with any hawkish Fed comments could see USD rebounding higher this week.
Technical Views
Copper
Price is now testing above the 6.2845 level and with momentum studies bullish, focus is on a move back up to the 6.5830 all-time highs next. With strong support beneath (local bull trend line and longer-term bull trend line + the 6.1090 level) focus is on a continuation higher.
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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.