The red metal may be approaching local lows. CTAs may still have some dry powder to sell, but they are unlikely to do so unless prices fall below the $8,440/t range, notes Daniel Ghali, senior commodity strategist at TDS.
A local low may be forming in the Copper markets
“The combination of a complete capitulation of macro funds and the effective end of algorithmic selling activity suggests that the Red Metal may be approaching local lows. After all, CTAs may still have some dry powder to sell, but they are unlikely to do so unless prices fall below the $8,440/t range.”
“While Copper would not be insulated from the ensuing pain in global markets linked to a deleveraging event, vulnerabilities are mitigated as it is no longer a crowded trade. Furthermore, our simulations of future price action reveal that CTAs could even return to supply over the next week, even in a range-bound trading environment.”
“A local bottom may be forming in Copper markets. Still, upside asymmetries in systematic trend-follower positions are most extreme in Aluminum, where we would expect large-scale buying activity if base metals rally.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
