Forecasts and market analysis based on price assessments from Fastmarkets MB and Fastmarkets AMM

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February 2020 | Base Metals

Technical analysis: Higher prices will come when spec positioning normalizes

Speculative positioning may have got overly short in response to the coronavirus uncertainty. At some point, positioning will normalize and recalibrate with the underlying macro and fundamental narratives for the base metals. That should bring higher prices.


The rebound momentum since the 2020 low of $1,685 per tonne (a three-year low) has found fresh resistance at the 38.2% Fibo retracement level ($1,742 per tonne) of the January high-to-February low. The bearish crossover between the 20 and 50 DMA is making its presence felt and has encouraged technical sellers to return to aluminium. Another bearish crossover between the 20 and 100 DMA should keep the LME aluminium price under downside pressure in the coming days. This could leave it vulnerable to another retest toward the lower boundary of the long-standing descending channel. That said, we are open to the idea that a full retest toward the February 2020 low remains in store, but it should attract dip-buying pressure again. Copper The LME three-month copper price has rebounded well from its February 3 low, resulting in a return to positive momentum; for...


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