Copper Price Today: Bulls battle 100-DMA amid steady USD, China headlines

Copper consolidates pullback from three-week top, recently on the bids.
US dollar dwindles amid sluggish markets, cautious mood ahead of FOMC minutes.
China plans to boost steel scrap usage, increase production of recycled nonferrous metals.

Anil Panchal FXStreet

Copper prices keep the weekly trading range below 100-DMA despite the previous day’s U-turn from the highest levels since mid-June. That said, the commodity picks up bids to $4.2825, up 0.74% intraday by the press time of the pre-European session on Wednesday.

On Tuesday, the jump in the US dollar, led by the market’s risk-off mood due to the coronavirus (COVID-19) woes and doubts over the economic recovery, weighed on the quote. However, the greenback’s recent lack of momentum and price-positive news from China back copper buyers of late.

US dollar index (DXY) bounces off an intraday low of 92.49, down 0.03% on a day, by the press time. While the covid woes remain on the desk, cautious sentiment ahead of the key Federal Open Market Committee (FOMC) Meeting Minutes, up for publishing today, seems to probe the greenback buyers.

On the other hand, Reuters unveiled news saying, “China plans to increase its use of steel scrap by 23% to 320 million tonnes by 2025 and to increase production of recycled nonferrous metals, including copper, to ensure supplies and to meet the country's climate commitments.”

Amid these plays, US Treasury yields remain pressured around the lowest since late February while stock futures lack direction white writing.

Moving on, FOMC minutes and news from China are the keys for copper traders going forward. As China struggles to overcome hawkish bets on monetary policy adjustment, the traders should wait for more bullish signals to keep the upside momentum. On the other hand, Fed policymakers’ divide will be challenging to the further price advances.

Price of Copper: Daily Chart

Copper prices have been under 100-DMA since last week and the MACD conditions also fail to signal any trend change. That said, sellers may wait for the downside break of $4.2250 to take fresh entries before targeting June’s low of $4.0880.

Meanwhile, an upside break of the 100-DMA level of $4.2910 needs validation from a downward sloping trend line from May 10, near $4.3950, to back the bulls.

Trend: Sideways

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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