Copper, natural gas, China’s economic downturn, temperature perspective – points of discussion
- Copper prices on the backFear of China’s economic downturn.
- Natural gas can be added to hot climates throughout South and West America
Basic view of copper
Copper prices plummeted earlier this week as the US dollar appreciated. Widespread risk aversion in global financial markets sent traders to Greenback, providing liquidity in an uncertain time. The root cause of the widespread cause has negative effects, especially for the red metal. Merchants are backing up their portfolios on another wave of Kovids, driven by a highly volatile Delta variant.
First of all, traders in the Asia-Pacific region and the United States are often unhappy with the growing Covi cases. However, as governments respond to the new threat with increasing locks and social distances, fears of economic stagnation appear to have entered the market. Locks are especially toxic to economic activity. China, Australia, and more recently, New Zealand have all been locked up in the last two months.
Earlier this week, China, a country that has taken a hard line on covanders, reported some dark economic data. Basis DailyFX Economic Calendar, Fixed asset investment, industrial production and retail sales are all unexpected for July and are down from the previous month. That copper trade has made its mark this week. Slow economic growth translates into low demand in the steel industry.
Supply-side issues were being created during a strike by the BPP’s Esconda station: the world’s largest copper miners. However, the union, which represents the miners, announced last week that it had reached an agreement with an operator in Australia. The deal has cast doubt on supply chain issues.
Basic view of natural gas
Natural gas prices have not changed much this week, following the biggest one-week drop since February last week. A strong greenback makes the purchase more expensive, so the strong dollar may be pushing up. That modified natural gas (LNG) could affect the volume of exports.
Elsewhere, for the first time in history, the U.S. regulator has declared a state of emergency for the Colorado River. The river in the western United States is the largest reservoir in the United States. It is flowing at close range, and is now at only 35% capacity. It is caused by years of drought that weakens the rainforest.
Dams control the flow of water from these reservoirs. Power is generated when water passes through dams and then through generators. Less water is released, which means less energy. That could be seen as a major source of energy in the region. The U.S. Department of Reconstruction forecasts that energy production is projected to drop by 2.5% year-on-year over the next five years.
Recent Predictions Prices in Western and Southern United States may rise sharply. Depending on the temperature range of 8-14 days in the National Weather Service, these regions can see above average mercury readings. Warm weather increases energy consumption when people finish their air conditioning units. That is good for natural gas consumption and therefore prices.
Technical view of copper
Copper prices have been on a downward spiral since Tuesday, February. The 78.6% Fibonacci recovery, from June to July, appears to be providing some support. Bulls have to reclaim the current line to restore prices on a solid basis. Alternatively, additional depressive activity may see the growing 200-day simple moving average focus.
Copper daily chart
Chart created by TradingView
Technical view of natural gas
Following the fall earlier this week, natural gas prices are on trend. Prices will rise sharply if support is held at an astonishing distance from the multi-year high earlier this month. However, if the trend stops, he may make a bear move on the cards. The growing 50-day easy-to-move average may lower prices.
Natural Gas Daily Table
Chart created by TradingView
Natural gas, copper trading resources
— Written by DailyFX.com analyst Thomas WestWater
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