The copper market itself lacks driving force, and the trend continues to be affected by the trend of international oil prices and the US dollar. As the dollar continued to rise after the Fed’s interest rate in May, copper prices fell significantly, and whether it can get rid of the downturn depends on the performance of oil prices.
A strong dollar weighs on the market
The Fed released dovish language in its May interest rate decision, U.S. stocks immediately led a rebound in risk assets, and the dollar fell for a while. However, after just one trading day, the market winds changed drastically, the dollar regained its strength and hit a new high, U.S. stocks fell sharply, and commodities and cryptocurrencies fell. This reflects that although the Fed’s rhetoric has eased, investors are still optimistic about the prospect of Fed tightening and do not believe that the Fed will really slow down interest rate hikes, and financial markets’ concerns about tightening liquidity have not diminished.
It is expected that the market trend is still led by the dollar, and risk sentiment may continue to be hit.
EU embargoes Russian oil turmoil
Another concern is the EU’s proposed embargo on Russian oil. After completely getting rid of Russian natural gas in 2027, the EU gave a timetable on May 4 to stop importing Russian crude oil, waiting for the unanimous approval of the 27 EU countries. However, there are differences within the EU on the embargo of Russian oil. At present, at least four member states of Hungary, Slovakia, the Czech Republic and Bulgaria are highly dependent on Russian crude oil and cannot completely cut off oil ties with Russia within the specified time, while the EU and the United States cannot Give practical alternatives. At the same time, Japan also stated that “Japan’s resources are limited, and it is difficult to immediately keep up with the pace of the EU.”
Investors focused on the 27-nation EU vote on Russia’s oil embargo plan, and international oil prices may continue to rise if the final sanctions are as severe as the current proposal. The current strong performance of oil prices has shown the market’s point of view.
Fine copper maintains range fluctuations, and the midline 4.50 is the focus of competition
The trend of copper prices still lacks strong guidance and continues to be pulled by the performance of the US dollar and oil prices. Under the pressure of the strong US dollar, the copper price that failed to break through showed fatigue, and fell below the mid-line of the shock range in the short term. You should pay attention to the performance of oil prices. Exploring the risk of the 4.00 mark.
Fine copper maintains a high range of 5.00-4.00. As copper prices fall below the midline of the 4.50 range, the short-term trend is bearish. If it continues to break below 4.25, it will test the 4.00 mark. This is the key support since February 2021. If it falls below, it will end. Sideways restarted the trend down. If the fine copper returns to the top of 4.50, it will fluctuate in the range of 4.50-4.80, until it can effectively break through 5.00 to open a new upside. The sideways trend of copper prices has not ended, and needs to wait for guidance.
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