The copper market rose on Tuesday, as we have seen rates and the US dollar drop after the lower-than-anticipated US Core CPI numbers.
Copper
The copper market rallied a bit during the trading session on Tuesday as the CPI numbers in the United States still came out much lower than thought. That being said, it suggests that the US dollar might be overvalued, and if that's the case, commodities could be a big winner. Copper, of course, will follow that same pattern, but you should also keep in mind that the copper market is highly sensitive to the overall demand situation, which continues to be very strong.
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If the US economy and the rest of the world, for that matter, continue to see signs of strength, then copper will be in high demand. After all, the AI data center situation demands a massive amount of copper, and then after that, you just have the overall construction boom.
Technical Indicators and Psychological Resistance Targets
Ultimately, it's worth noting that we had broken above a sideways candlestick from the previous session, and now we are looking at the 50-day EMA as an area that has been support previously. The $6.50 level above is a large round, psychologically significant figure, and an area that's been important a couple of times.
I would anticipate that there's some type of reaction there, but I also think what's more important is that it makes for a nice target. A short-term pullback probably offers a buying opportunity, and I would like to be on the right-hand side of the V using smaller time frames. I have no interest in copper being short because, of course, the demand will continue to be very strong over the next several years. This, for me at least, is a market that I think will continue to see a lot of buyers over the longer-term, and therefore I am looking to buy dips going forward.
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