Copper Trade Deals Still In Balance
Copper price action has turned positive recently as hope returns of a trade deal between China and the US improve. Over the long weekend, Mexico and America managed to work out a deal although it greatly benefitted the US. The deal featured a wage increase for Mexican workers in the motor industry to ensure that US manufacturers do not undercut US workers in a bid to find cheaper labour down south.
Interestingly this could work as a double whammy for copper markets. To counterbalance the issues with trade, China is looking to boost infrastructure spending. Now if the US and China work out a deal then copper will get twice the fundamental power. Although, Wilbur Ross has recently stated this is not the time to negotiate with China.
From a price point of view, we can see that the lows were defended with good volume, at the lows of $2.55/lb and in the next session we saw a spike in volume up to $2.64/lb. Price has now broken a downtrend line and moved higher into a previous consolidation area. $2.78/lb could provide some intraday resistance we may see some consolidation around there....