Copper snaps three-day downtrend around $4.30 on USD weakness, US PCE Inflation eyed

Copper futures on COMEX recall buyers after three days of rejections as the US dollar weakness underpins commodity buying.  That said, the quote rises to $4.29 by the press time of early Friday morning in Europe.

Prices of the three-month copper on the London Metal Exchange (LME) and the most-traded July copper contract in Shanghai also portray notable gains of late, respectively around 1.1% and 1.3% as the prices rise to near $9,550 and $10,700 in that order.

The US Dollar Index (DXY) refreshes the monthly low at the 101.43 level as market participants cheer the lack of uncertainty over the Fed’s next move with zeal. Also weighing on the greenback could be the recently downbeat US data. It should be noted that the latest FOMC Minutes and Fedspeak have both confirmed two 50 bps rate hikes, which the market seems to have already priced and hence allows traders to trigger the month-end profit booking moves of the USD.

That said, the US preliminary Q1 2022 Annualized GDP eased to -1.5%, below -1.4% prior and -1.3% forecasts, whereas the Pending Home Sales slumped in April, to -3.9% versus -2.0% forecast.

It’s worth noting, however, that downbeat data from China and fears of global recession, as well as cautious mood ahead of the US Federal Reserve’s (Fed) preferred inflation gauge, namely the US Core Personal Consumption Expenditure (PCE) Price Index, tests buyers.

China’s Industrial Profits for the January-April period dropped to 3.5% versus 8.5% prior whereas the figures for April slumped to -8.5% versus 12.2% previous gains.

Hence, copper’s recent gains remain doubtful amid macro pessimism. Though, softer US data may help the red metal to extend the month-end consolidation.

Technical analysis

A weekly high around $4.35 holds the key to COMEX Copper’s further upside.