Copper is a proxy for hard/soft landing scenarios

  • Copper

Copper is trading at a down sloping green trendline on its weekly chart at 1. It is also facing the challenge of overcoming its black 30-week EMA (2). The base metal's RSI has popped above 50 at 3, which is the bullish side of the indicator. It will be interesting to see if it can hold above 50 because below has been the norm since April (blue rectangle). If it can hold above this threshold, an underlying momentum will likely aid copper in overcoming the black 30-week EMA and the down sloping trendline.

Copper is a good proxy to monitor regarding the soft-landing scenario. I.e. a stronger copper price likely points to a softer-landing due to it being a key input in industry.

However, a failure to move higher will be a worrying sign. It struggled on Wednesday on jobless claims data, poor core durable goods and also the University of Michigan inflation expectations. If the base metal declines it will be regarded as a negative development for the risk side of the market, and potentially point to a harder landing then currently expected.

Image by Alexa from Pixabay

Russell Shor

Senior Market Specialist

Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.

${} / ${getInstrumentData.ticker} /

Exchange: ${}

${} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)

${getInstrumentData.oneYearLow} 52/wk Range ${getInstrumentData.oneYearHigh}

Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.

Past Performance: Past Performance is not an indicator of future results.

Spreads Widget: When static spreads are displayed, the figures reflect a time-stamped snapshot as of when the market closes. Spreads are variable and are subject to delay. Single Share prices are subject to a 15 minute delay. The spread figures are for informational purposes only. FXCM is not liable for errors, omissions or delays, or for actions relying on this information.