Copper (COPX, JJC), which fell by about 0.5% and trades around $4.08 per pound in the European trading session, is elevated by a weaker dollar and higher demand with concerns of lower supply.

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Chinese credit growth is strong and supports the nation’s intentions to support the infrastructure construction which supports the price of the base metal.

The London Metal Exchange shows that inventories fell towards 56,000 tons which is the lowest since 2005, driving the price even higher as Goldman Sachs projects a global shortage of copper inventories around September.

The state owned company Codelco from Chile estimated that output will sink around 7% after a 10.6% decline in the prior Year. Supply concerns seemingly are the pressure factor as prices get driven higher just like with the OPEC+ production cuts for the oil price. This might add to the inflationary pressure, prompting central banks to conclude the best projections for interest rate hikes. The current more dovish view with potential cuts around July to November might be lifting for commodities as the dollar is weakening.

Looking at the technical perspective of the Copper market we can observe some selling around the Year’s upper value extreme on the daily interval. Seemingly the market closed with a selling tail and absorption in combination with long liquidations around the prior swing highs which could initiate the price to pullback as rotation to the developing VWAP or lower value extreme as secondary buying option for core long positions.

Taking a glance at the current TPO profile structure of this market, we can observe a balanced prior structure as the market cleared the unsecured low and might hit absorption to bring the price back into the previous price range which could initiate more buying. For the moment, the market is imbalanced with a slightly bearish bias for this session. Any bullish scenarios might target the prior POC level.

Current calculations, including the aspect of volatility, might show a mixed view which could lead the market to a balanced behavior, confluent with the fundamental supply concerns and the technical perspective.

3 Days Ago

The managed money sector is more likely mixed as investors seemingly closing positions on both sides as of the COT data from the 11th April while net buying increased for three weeks.

Hawkish remarks by Fed Gov. Waller that inflation is too high spurred the fears for additional rate-increases in combination with visible weakness in the U.S. economy by lower-than-expected retail sales, pointing to lower spending. And the higher inflation expectations, pressures commodities and equities for the session.  

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