Calm Before the Storm?

Copper prices are on course to end the week in muted fashion, currently sitting just below the weekly opening price. The market managed to recover from a push lower earlier in the week while a subsequent rally ran into selling interest. Price action seems to reflect the uncertainty in the market ahead of expected tariffs from Trump this weekend.

Trump Tariffs

Over the week, an uptick in rhetoric from Trump on forthcoming trade actions fuelled volatility across the board in commodities markets. However, traders still aren’t clear on whether Trump will go ahead with tariffs against China, which would be the most impactful for copper prices. Trump’s tone on China has been inconsistent, swinging between taking a softer stance at times and threatening more aggressive action at others.

Market Impact

As such, the market is very much in wait and see mode. If Trump goes ahead with the 10% tariff on China that has been mentioned, copper prices would likely be skewed lower near-term, though the decline might be limited given the lower tariff amount. However, if Trump delays taking action on China, we could see a firm relief rally in copper near-term.

Technical Views

Copper

For now, the market remains tethered to the 4.30 level, sitting in the middle of the contracting triangle structure which has framed price action over the last year. To the downside, 4.0395 is the main support to note while, topside, 4.5785 is the key resistance level to watch.