Copper prices edged lower on Thursday as traders booked profits following a rate cut by the U.S. Federal Reserve, while the dollar firmed after Fed Chair Jerome Powell ruled out more aggressive easing going forward.

Benchmark three-month copper on the London Metal Exchange was down 0.4% on $9,960.50 per tonne by 0940 GMT, after touching a one-week low of $9,925 on Wednesday.

Following the rate cut, the U.S. Central Bank also indicated that more cuts would follow in October and December, but Powell pushed back in his press conference against the idea that those could be larger cuts.

The dollar index DXY firmed by 0.1% to 96.98 on the back of his remarks but is still down around 10.6% this year. A stronger dollar makes dollar-denominated metals more expensive for holders of other currencies and can weigh on prices.

Dan Smith, managing director at Commodity Market Analytics, said the rate decision on Wednesday was one of the key drivers behind copper’s dip but also pointed to a technical chart pattern known as a “triple top”.

“There has been quite a lot of overhead resistance for copper around the $10,160 level,” Smith said. “It’s turned at that point three times recently, which means the momentum is likely to be on the downside for the time being.”

Most of the rest of the base metals complex was in the red. Aluminium ALI1! slipped as much as 0.6% to $2,665.50 a ton, a one-week low, and was down 0.2% as of 0940 GMT.

The premium of the cash aluminium contract to the three-month contract (CMAL0-3) had narrowed to $4 a ton on Thursday, from $16 a ton on Tuesday.

Zinc fell 0.9%, nickel slipped 0.4% and tin shed 1.2%, while lead was trading flat at $2,012 per ton.
Source: Reuters