The copper market tried to recover early on Wednesday to reach the $6.50 level before seeing selling pressure again.
The $6.50 level is an area that has been important multiple times, and therefore it is not a huge surprise to see that the sellers reemerged, especially as there are a lot of concerns about whether or not the Middle East will settle back down or if we are going to continue to have to deal with more nonsensical noise.
Ultimately, we have a situation where they are talking about coming up with some type of framework to come to an agreement. In other words, this is going to drag on for the rest of our natural lives, or at least it feels that way. This has a major influence on the global supply chain, and while there is a major shortage of copper around the world, the reality is that there are a lot of concerns that central banks will keep monetary policy fairly tight due to the fact that inflation, especially energy, but also commodity inflation, could really start to rally and cause a lot of trouble for the global economy.
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As copper stands, it is a great look at where we may be going because it is used in so many different things. I think eventually we get some type of bounce that we can start buying, but right now we don't have it.
The 50-day EMA sits just below the $6.10 level. I think that's an area that could offer significant support.
If we were to turn around and break above the $6.50 level, then copper really could take off to the upside. I think it happens given enough time, but we may need to drift a little bit lower and bounce again to make a serious attack on that level.
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