Morning Futures Roundup
Risk-On Aiding Copper Prices
Fundamentals
Copper futures are up for a third consecutive session ahead of US consumer confidence. Equity and commodity markets got a boost from the German legislature, as a second bailout for Greece was approved. The bailout, along with increased risk appetite from investors, has resulted in a weaker US Dollar. Defensive currencies, like the greenback and Japanese Yen, have been on the defensive lately, as investors have become increasingly confident in the EU's various bailout packages. There are also doubts that the slowdown in China will be as dramatic as previously expected. Nonetheless, the Chinese government is attempting to head-off a sharp slowdown in economic activity by lowering banks' reserve ratios.
Technical Notes
Turning to the chart, we see the May Copper contract testing the $4 level earlier this month, but failing to break through. The market was able to hold support at the 3.75 level, suggesting many traders may being focusing their attention to 3.75 and 4.00. Failure to hold 3.75 could be seen as a negative and would confirm a double-top on the daily chart, hinting at a possible test of 3.50 on the downside. If the market is able to pick up enough steam to break-out above the 4.00 level, the market may test 4.25 or, possibly even the 4.50 level.
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About Mike Zarembski
Born in the grain pits of the Mid-America Commodity Exchange (MidAm) in the early 1990s, Mike's futures career soon shifted to the offices of TD Waterhouse in 1999, followed by Xpresstrade in 2002 and eventually optionsXpress in 2007.
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