The demand for copper will continue to be an important factor in this market, as it will only go up from here.
The copper markets gapped lower to kick off the Thursday session, but where we gapped to was the crucial 50-day EMA, an area that technical traders will be watching, generally speaking, and it is worth noting that the 50-day EMA has offered a little bit of a trend line over the last roughly 2 months. So, bouncing from there is not a huge surprise.
That being said, it is worth noting that this market has found itself to be somewhat noisy and somewhat negative in the short term, but I also recognize that this is a market that has a major supply and demand imbalance. After all, the demand for copper is more likely than not only going to increase from here as the world switches to an electrified economy, and, of course, AI data centers will demand a lot of copper as well.
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Technical Support and Market Outlook
At this point in time, I think it makes sense that we try to find some type of range to trade in. That is typical for copper, and it looks like the 50-day EMA, basically $6.20, does in fact look like it's going to be supported. It has been in the past, and by extrapolating from there, you start to look for resistance, and you see it near $6.70.
Even if we were to break down from here, I think you have a scenario where a lot of traders would look at the $6.00 level as a major support level as well. Ultimately, I do think we go higher, and I think we are going much higher, but one of the concerns that we have right now is inflation and whether or not that would bring a global downturn.
Quite frankly, I would welcome the idea of buying copper at much lower levels, probably not just in the futures market, but possibly in some of the related companies that people typically invest in. I am only looking to buy this market, and it looks like we are possibly at the bottom of us.
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