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  • $EURUSD may also extend recent losses after plunging through psychological support at 1.2000. Clearing the February low (1.1952) would probably ignite a push to challenge former resistance-turned-support at 1.1890. https://t.co/yMGqtyRjVn
  • With that in mind, $AUDUSD could be at risk of a more extended pullback towards confluent support at the February low (0.7564) and Pitchfork parallel, if price breaches 0.7690 https://t.co/JaFdxpYhnv
  • This push higher in yields may pave the way for $USD to continue its recent recovery, as the Greenback breaches Descending Channel resistance and tentatively pushes above the neckline of an inverse Head & Shoulders pattern https://t.co/2ehR52hYqk
  • US 30-Year Treasury yields storming higher after Fed Chair Powell fails to hint at an adjustment to the central bank's current monetary policy settings A push to 2.4% looks on the cards in the near term, with the Double Bottom implied measured move coming in at 2.58% #US30Y https://t.co/3p4yY93frQ
  • The recent surge in the Treasury market has pushed the benchmark 10Y yield back above the S&P 500 dividend yield https://t.co/x28BFkmjNv
  • S&P 500 on the verge of getting separation from March trend-line. Nasdaq 100 below March trend-line, triggering H&S pattern. Get your #equities market update from @PaulRobinsonFX here:https://t.co/quhMgBpoiq https://t.co/n0jtTnVNwl
  • Japanese Gov't recommends 2-week extension of Tokyo virus emergency - BBG $JPY
  • While the rise in yields is weighing on risk trends, carry trade didn't seem to take the hit. In fact, the charge in US yields seems to have far outweighed the de-risking from $USDJPY's perspective: https://t.co/KpOpgopOep
  • Forex Update: As of 21:00, these are your best and worst performers based on the London trading schedule: 🇨🇦CAD: -0.09% 🇬🇧GBP: -0.40% 🇦🇺AUD: -0.69% 🇳🇿NZD: -0.81% 🇯🇵JPY: -0.90% 🇨🇭CHF: -0.97% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/8Tvotykz9y
  • Commodities Update: As of 21:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 0.33% Gold: -0.69% Silver: -2.64% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/faJTbi16VK
Copper, Crude Oil Prices Surge. Eyes on Fed Chair Jerome Powell for Next Moves

Copper, Crude Oil Prices Surge. Eyes on Fed Chair Jerome Powell for Next Moves

Daniel Dubrovsky, Strategist

Copper, Crude Oil, Fed Chair Jerome Powell, YCC, Commodities Briefing - Talking Points:

  • Copper and crude oil prices extend dominant uptrends as US Dollar sinks
  • Traders may be pricing in Fed yield curve control on medium-term rates
  • All eyes on Jerome Powell as market sentiment improves to start Tuesday
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After Monday’s 1.64% gain, copper futures are one step closer to the best month since November 2016, where the red metal gained about 18.9%. At the time of writing, COMEX copper futures are up roughly 17.8% in February. Surpassing the performance in November 2016 would mean the best month since 2009. The rally in the red metal was not exclusive to it, as it was a generally bullish day for commodities and precious metals.

This is despite a mixed session for market sentiment, one that seemed to benefit commodities. While the tech-heavy Nasdaq Composite slumped 2.46% on Monday, the Dow Jones Industrial Averaged managed to sneak in a 0.09% gain. In fact, the energy sector was among the three best-performing segments in the Dow. Crude oil prices climbed 5.5 percent over the past 24 hours.

What started off as a rosy day for sentiment reversed course into the final trading hours of Monday’s session. This initial optimism helped boost copper and oil prices. But, as market sentiment deteriorated, the US Dollar lost some of its ground, offering more momentum to commodities. For both copper and crude oil, supply constraints and heavy demand expectations continued to support their price trends.

Sentiment is improving thus far, with futures tracking Wall Street pointing in the green heading into European and North American hours. This is leaving copper and crude oil prices in a position to extend gains. But, all eyes are on Fed Chair Jerome Powell, who will be presenting the central bank’s semi-annual monetary policy report. He may be questioned about rising longer-term Treasury yields, reflecting optimism in the outlook.

There may be a degree to which markets are pricing in some aspects of yield curve control (YCC) from the Federal Reserve. As such, if there isn’t a mention of it ahead, then precious metals like copper and gold could be at risk of a near-term pullback. Rising longer-term government bond rates are slowly sapping away potential from non-yielding assets. If the former keep rising, then gains in the latter may slow.

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Copper Technical Analysis

Copper futures extended gains past peaks achieved in 2012, taking out the 3.9390 – 3.9895 resistance zone last week. This has exposed all-time highs achieved in 2011, making for a critical zone of resistance between 4.5400 and 4.6495. Near-term downside risks seem to be elevated, with the 20-day Simple Moving Average hovering below around 3.7405. This could come into play in the event of a deeper pullback.

Copper Futures Daily Chart

Copper, Crude Oil Prices Surge. Eyes on Fed Chair Jerome Powell for Next Moves

Chart Created Using TradingView

Crude Oil Technical Analysis

Crude oil prices are nearing the 2020 peak at 64.62. However, negative RSI divergence does warn that upside momentum is fading. A turn lower may place the focus on a rising trendline from November – red line on the daily chart below. Falling under it could open the door to a larger pullback.

WTI Crude Oil Daily Chart

Copper, Crude Oil Prices Surge. Eyes on Fed Chair Jerome Powell for Next Moves

Chart Created Using TradingView

--- Written by Daniel Dubrovsky, Strategist for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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