The copper market initially rallied on Monday, but the area right around the 50 Day EMA continues to be a bit of an issue.
Copper
The copper market has initially rallied during the trading session on Monday, testing the 50-day EMA, but has found quite a bit of trouble right around that indicator, and in fact, it looks a bit like we are starting to form a shooting star for the session.
Top Regulated Brokers
If we can break above the high of the trading session on Monday, that would be a very good sign, but we are starting to see a little bit of pressure on anything that gets a bit of a boost from higher inflation. If that is, in fact, going to be the case, then copper should fall in line. I do believe longer-term copper goes much higher, and I am bullish on copper, but I also recognize that we are in a little bit of a squeeze.
Supply Chain Realities and Macroeconomic Pressures
Part of what is going on is that the Strait of Hormuz is opening, and people believe that suddenly the supply chain around the world is going to snap back to where it was before the war. While that is probably true someday, that's not the reality right now. Another pressure on the copper market currently is the AI trade coming unraveled a bit. If that continues to be the case, that will obviously have a negative influence on copper as well.
I'm currently watching the $6 level very closely as it looks like we could see a bit of support there. Anything below the $5.80 level starts to get a little bit interesting. I think at that point, you could see an unraveling. You would be meeting up with the 200-day EMA in that situation, and that could, of course, have implications for the longer-term trend.
Nonetheless, I still think that before it's all said and done, investing in copper works out over the longer term, but I also recognize that things will be noisy.
Ready to trade our daily Forex forecast? Here’s a list of some of the best online forex trading platforms to check out