Copper Fundamental Forecast – July 28, 2016

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Published: Jul 27, 2016, 14:10 UTC

September Comex High Grade Copper futures finished the early session lower at $2.2105, down -0.0150 or -0.67% as many of the major players took to the

September Comex High Grade Copper futures finished the early session lower at $2.2105, down -0.0150 or -0.67% as many of the major players took to the sidelines ahead of Wednesday’s U.S. Federal Reserve monetary policy statement, due to be released at 1800 GMT.

Although the Fed is expected to keep interest rates unchanged, copper traders will be watching the language of the report to see if the Fed is hinting at the timing of its next rate hike. At this time, traders have priced in a 50% change of a rate hike in either September or December.

The Fed statement is important to copper traders because it will affect the U.S. Dollar. Copper is dollar-denominated. Talk of a Fed rate hike will make the dollar a more attractive investment, driving up its value. This could hurt demand for copper because it makes it more expensive for foreign traders. A dovish Fed could be supportive for copper prices.

London copper was also under pressure on Wednesday, dropping to near one-week lows as sentiment soured in China. Copper prices fell in sympathy with China stocks which weakened on fears of tighter regulatory restrictions after Beijing officials earlier this week warned about asset bubbles.

In other news, Chilean copper miner Antofagasta said full-year copper production would be at the lower end of the 710,000 tonnes it predicted in January as a global market surplus shows little sign of easing.

Today’s price action into the close will be dictated by the Fed announcement. Look for Copper to weaken if the Fed is hawkish and the dollar rises. If the Fed is dovish then Copper could catch a bid.

FxEmpire provides in-depth analysis for each asset we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

Today’s economic releases:

Cur.	Event	Actual	Forecast	Previous
AUD	CPI (YoY) (Q2)	1.0%	1.1%	1.3%
AUD	CPI (QoQ) (Q2)	0.4%	0.4%	-0.2%
AUD	Trimmed Mean CPI (QoQ) (Q2)	0.5%	0.4%	0.2%
EUR	GfK German Consumer Climate (Aug)	10.0	9.9	10.1
GBP	GDP (QoQ) (Q2)	0.6%	0.4%	0.4%
GBP	GDP (YoY) (Q2)	2.2%	2.0%	2.0%
USD	Core Durable Goods Orders (MoM) (Jun)	-0.5%	0.3%	-0.3%
USD	Durable Goods Orders (MoM) (Jun)	-4.0%	-1.1%	-2.3%
USD	Pending Home Sales (MoM) (Jun)	0.2%	1.4%	-3.7%
USD	Crude Oil Inventories		-2.257M	-2.342M
USD	Cushing Crude Oil Inventories			0.189M
USD	FOMC Statement
USD	Fed Interest Rate Decision		0.50%	0.50%

Upcoming Economic Events that you should be monitoring:

Thursday, July 28, 2016

Cur.	Event	Actual	Forecast	Previous
GBP	Nationwide HPI (MoM) (Jul)		-0.2%	0.2%
GBP	Nationwide HPI (YoY) (Jul)		4.5%	5.1%
EUR	German Unemployment Change (Jul)		-3K	-6K
EUR	German Unemployment Rate (Jul)		6.1%	6.1%
EUR	German CPI (MoM) (Jul)		0.2%	0.1%
USD	Goods Trade Balance (Jun)		-61.10B	-60.59B
USD	Initial Jobless Claims		260K	253K

Government Bond Auctions

Date/Time Country Type

Jul 27 11:30 Germany Eur 1bn 2.5% Aug 2046 Bund

Jul 28 11:10 Italy Holds bond auction

About the Author

James Hyerczykauthor

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.