Contrary to all market logic, major industrial metals are preparing to enter a wide range near the peaks. Following the announcement of tariffs by the US authorities, bears prevailed in the industrial metals market and the downward momentum is still in force. If we look at LMEX – the index of basic industrial metals, we will see that the correction from the peaks of the five-year upward trend is already in place.
What’s happening on the London metal market?
Let’s look at two of the major metals driving the world economy.
1. Copper – copper is still held in the ascending channel and is currently at key levels that are, at first sight, quite tempting to hold long positions.
What bothers the bulls despite the good Price Action at key levels is the fact that Trump’s new tariffs will limit trade, which in turn will lead to the accumulation of large stocks of producers. If we need to visualize market concerns, the current levels are Okay for Long, but with a very short investment horizon. According to a large number of analysts, copper could hardly break the peaks formed at the end of last year.
2. Aluminum – The aluminum, which receives a 10% import tax in the US, looks like copper.
The price is at a key level for the long and will most likely go up, but considering the concerns surrounding the Trump Trade War, we’re unlikely to see a new peak. The price is at a key point of support, formed by a basic diagonal, short diagonal, 200SMA, and horizontal support. In support of the long-standing idea is CCI50, which is in the over-sales area and pointing up, as well as a 23.6% Fibonacci correction.
Jr Trader Petar Milanov