The market initially pulled back just a bit during the trading session here on Wednesday, testing the 50-day EMA, but then turned around to show life again.
Copper
The market initially pulled back just a bit during the trading session here on Wednesday, testing the 50-day EMA, but the US Treasury market is talking about issuing twice the issuance of the 30-year debt, and that opens up the idea that the Federal Reserve might be liquefying markets, or quite frankly is, and maybe an easier interest rate policy could be coming down the road. That should help with construction and thereby drive up demand for copper, but you also have the situation where hard assets tend to do better in the idea that the dollar could shrink. This is, of course, priced in US dollars, but ultimately, really at the end of the day, you can simplify this as just saying that we continue to see support at the 50-day EMA in an uptrend.
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We are right around the $6.50 level. This is an area that is a little bit of a magnet for price. It was previous resistance back in February. We broke through it, kind of pulled back towards the $6 level, and then now rallied again.
Technical Support and Long-Term Upside Targets
All things being equal, this is a market that continues to see the $6.80 level above as a bit of a barrier. If we can break above there, then the $7 level could be the target next.
If we break down below the low price of the Tuesday candlestick, we might get a little bit more of a correction, maybe even as low as $6, where the 200-day EMA resides. Regardless, I have no interest in shorting copper. I do think this is going to be one of the better-performing markets over the longer term.
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