Copper is trading in an extremely tight range as investors are focused towards Washington and wondering if the politicians can finally understand the urgency of resolving this political gridlock which has once again called for deja vue. The rating agency, Fitch, has put the biggest economy of the world, U.S on a negative watch due to illiterate attitude which politicians are using to resolve the debt ceiling and the government shutdown dispute
Whether the politicians can craft a new ship which can sail through this storm is appearing less likely, as we are approaching towards the final few hours of the debt ceiling deadline and the clock is ticking fast. Given the volatility index which is considered as a good gauge of fear is still not near the explosion level and dollar is still relatively stronger against a major basket of currencies makes me believe that a default by the US government is not imminent.
If US does avert a default with a firm solution in place, this could undoubtedly push the markets higher and we could see a garden-fresh appetite by traders for copper.
Focus The immediate support for December future is at $324 and a break of this could easily open the floor towards the $320 level. On the upside, the major resistance could be at the $336 level could followed by $340.