Copper Pulls Back From Highs As China Cracks Down on HFT
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China HFT Crackdown
Copper prices on course to end the week slightly lower after reversing from fresh record highs midweek. The metal had been firmly stronger over the first half of the week as better data out of China fed into rising demand expectations and bullish trader sentiment. However, the sharp pullback from those highs is raising fears that the move was driven more by speculative action than solid market dynamics. China announced a crackdown on high-frequency trading (HFT) as part of a wider effort to reduce risks to its capital markets. Given the move lower in copper in response to this news many deem that speculative buyers had been a big part of the latest push higher.
Trump Defers Metals Tariffs
Alongside news of the HFT crackdown, copper prices have also been impacted lower by news that Trump will defer tariffs on critical metals for now. At the start of the week, expectations that a fresh tariff on metals was due imminently had also been feeding into bullish sentiment. With Trump since walking back these hawkish threats copper demand has weakened, again highlighting how sensitive price action is to headlines around Trump tariffs.
Looking ahead, there is still room for copper prices to return to highs. Recent supply disruptions at key sites in South America are a reminder that copper is vulnerable to upside action on any incoming headlines relating to further issues.
Technical Views
Copper
The latest test of the 6.1090 level has seen the market reversing lower. Price is now retesting the 5.8550 level and with momentum studies weakening, risks of a deeper push lower are seen with 5.4415 the deeper support level to note. While 5.8550 holds, however, focus is on a recovery higher.
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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.