Copper price is finding support in the easing of the US dollar and progress in the debt ceiling deal. Even so, economic woes continue to weigh on the red metal.
Copper price remains under pressure despite the recent rebound. On the one hand, progress in the US debt ceiling deal has boosted the red metal in recent sessions. Concerns over a probable defaulting and what that would do to the US economy had yielded a risk-off sentiment.
The House of Representatives overwhelmingly voted to pass into law the borrow more money. The vote of 314 against 117 comes just a few days before the deadline on 5th June. Eyes are now on the Senate.
Expectations of the Fed pausing on its aggressive interest rate hikes as from June has also offered some support to the dollar-priced red metal. Investors now await further cues from the jobs report set for release later on Friday. Strong labor numbers may boost the greenback while curbing copper price gains.
Besides, fading momentum in China has continued to weigh on the red metal. Seeing that the second largest economy is the leading consumer of industrial metals, concerns over its economic recovery remains a key bearish driver. Recent data showed that profits from the country’s industrial firms dropped during the year’s initial four months. Soft demand and margin pressures are the key underlying factors.
Copper price prediction
On Friday, copper price extended gains from the previous session. Even so, it remains below the once steady support zone of 3.7855. As at the time of writing, COMEX copper futures were at 3.7425.
A look at its daily chart indicates that the commodity is still trading below the 25 and 50-day EMAs. Based on both the fundamentals and technicals, the bears are still in control despite the rebounding.
To regain control, the bulls will need to boost copper price past the support-turn-resistance zone of 3.8455, which is along the 50-day EMA. In the meantime, the range between 3.7855 and 3.6175 will be worth watching.