Copper Rallying
Copper prices have enjoyed a solid first week of trading in 2025 with the futures market currently boasting gains of almost 8%. Notably, the rally in copper prices this week comes amidst a fresh uptick in USD and against a backdrop of heightened uncertainty around expected Trump tariffs ahead of his inauguration later this month.
Better US Data
On the USD front, strong US data this week (ISM services & JOLTS jobs) have further strengthened hawkish Fed expectations on the back of the guidance given in December. Indeed, last night’s FOMC minutes confirmed the Fed’s outlook on slowing the pace of easing against current inflation risks and strong growth. With this in mind, traders now look to tomorrow’s headline NFP data. If we see further strength, Q1 rate cut pricing should fall further, leading USD higher near-term.
China Focus
However, given that copper prices have so far shunned the strength in USD, focus looks to be geared more towards expectations of fresh Chinese stimulus. Following the PBoC’s guidance last week that it will cut rates again at the appropriate time, traders are now expecting a fresh wave of measures. The bank’s confirmed shift to an easing stance last year has been seen as laying the groundwork for fresh and more sweeping support this year, aimed at boosting the economy. Such expectations are currently underpinning copper prices via an expected uptick in demand and should keep copper prices moving higher near-term.
Technical Views
Copper
The rally in copper has seen the market trading back up to test the 4.3090 level. With momentum studies turned bullish, focus is on a breakout above the level with the triangle highs the next resistance to note, ahead of structural resistance at the 4.5785 level above.
.png)
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.