Copper - are traders getting to carried away?
Copper has pushed higher now for 2 sessions in a row after a great rejection of $2.60/lb 3 days ago.
LME and Comex traders have been positive since the US and Mexico came to some sort of agreement on immigration. Trump has said that he will not add more tariffs to Mexico as long as the immigration deal stands.
The Mexican president has remained coy saying that the trade war is not over yet and it seems he takes Trump's actions with a pinch of salt which in my opinion is wise.
Meanwhile in Asia, hopes that the PBoC and the government are adding stimulus to the market is gaining momentum. The most traded copper contract in Shanghai jumped 1.5% and copper stocks in the country rose too. Trump also said he is looking forward to meeting President Xi later this month although there is no official confirmation of this meeting.
Looking forward it seems that metals traders are hoping that the trade war rhetoric will improve but it seems hopeful as every time Trump and Xi meet it sounds positive but the base metals markets sell off due to disappointment.
On the technical side of things, the break back toward $2.70/lb is significant but $2.75/lb looks to be a formidable resistance level. I will be watching volume closely at that level for any signs of a slowdown and no doubt it will come at the time of the G20 meeting.