Wednesday, November 20, 2019 4:10 AM EDT
Copper prices have been moving alongside priced-in Fed monetary policy expectations for much of the year. That makes sense: the US-China trade war has threatened to amplify a global economic slowdown underway since early 2018, stoking bets on a dovish turn from the US central bank as well as darkening demand prospects for the cycle-sensitive commodity.
Chart created with TradingView
A parallel upturn since early September appears to reflect newfound hope that Washington and Beijing are on the cusp of some sort of “phase 1” accommodation that lays the groundwork for a broader deal. Indeed, the Fed directly cited diminished trade war risk when it signaled a pause in its interest rate cut cycle following October’s meeting of the FOMC policy-setting committee.
FOMC MINUTES IN FOCUS AS COPPER PRICES EYE TREND RESISTANCE
The release of minutes from that gathering now loom large as recent gains put the benchmark HG copper contract within a hair of resistance guiding it lower since mid-2018. An upbeat tone reiterating Chair Powell and the company’s newfound optimism may cheer investors and stoke risk appetite, pushing the metal upward. A topside break confirmed on a daily close above 2.7705 initially exposes the 2.8355-8710 zone.
Alternatively, the revelation of a cautionary undertone moderating recent cheer might pressure copper lower. In fact, markets have had ample time to price in the pause in rate cuts, so even a status-quo result may be dismissed as insufficient to drive continued gains and trigger profit-taking. If that translates into a close below rising countertrend support at 2.6035, the 2.5160-5520 region beckons next.
Chart created with TradingView
Disclaimer: DailyFX, the free news and research website of leading forex and CFD broker FXCM, delivers up-to-date analysis of the ...
more
Disclaimer: DailyFX, the free news and research website of leading forex and CFD broker FXCM, delivers up-to-date analysis of the fundamental and technical influences driving the currency and commodity markets. With nine internationally-based analysts publishing over 30 articles and producing 5 video news updates daily, DailyFX offers in-depth coverage of price action, predictions of likely market moves, and exhaustive interpretations of salient economic and political developments. DailyFX is also home to one of the most powerful economic calendars available on the web, complete with advanced sorting capabilities, detailed descriptions of upcoming events on the economic docket, and projections of how economic report data will impact the markets. Combined with the free charts and live rate updates featured on DailyFX, the DailyFX economic calendar is an invaluable resource for traders who heavily rely on the news for their trading strategies. Additionally, DailyFX serves as a portal to one the most vibrant online discussion forums in the forex trading community. Avoiding market noise and the irrelevant personal commentary that plague many forex blogs and forums, the DailyFX Forum has established a reputation as being a place where real traders go to talk about serious trading.
Any opinions, news, research, analyses, prices, or other information contained on dailyfx.com are provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
less
How did you like this article? Let us know so we can better customize your reading experience.