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Weak USD Boost Copper
A weaker US Dollar has set the tone for trading over the first full week of 2025. Risk assets are enjoying a recovery rallying amidst the current USD pullback and with plenty of key US data to come this week, there is room for the rally to gain further ground if USD continues to weaken. Copper prices have been a standout winner so far this week with copper futures rallying around 5% off last week’s lows. Alongside weakness in USD, some bullish market commentary is also helping lift copper prices here.
China Easing Optimism
Looking ahead this year, Deutsche Bank noted this week that it expects the copper market to end the year in a deficit. While, near-term, the market remains vulnerable to global macro events, the German IB says the potential for a wave of fresh stimulus measures in China should help bolster copper prices this year, targeting a move back up to around $9.8k per tonne by year end, more than double the current market valuation.
US Jobs Report
This week, focus will be on the latest round of US labour market readings due on Friday. If we see any downside surprises, this should lift March rate cut pricing, leading USD lower and creating room for copper prices to recover further. However, any upside surprises should further dilute March rate-cut expectations, helping USD recover while capping the rally in copper.
Technical Views
Copper
The rebound in copper prices has seen the market moving back above the contracting triangle lows. With momentum studies turning higher, focus is on a test of the 4.30 level next and the triangle highs above that. To the downside, 3.9350 is the key support to note for the market near-term.
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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.