Copper Technical Analysis

Copper is still trading
inside a major triangle as the fundamental outlook remains murky. The Chinese
stimuli had a positive effect in the past months as the data picked up, but
this week the PMIs fell again and the Manufacturing sector went
back into contraction. Moreover, the economic data in other major economies
like Europe is deteriorating pretty quickly as the block is falling into a
recession. The US economy remains resilient for now, but recently the labour
market data has started to weaken, so that is something that the market will
watch carefully.

Copper Technical Analysis –
Daily Timeframe

On the daily chart, we can see that Copper is still
trading inside the descending triangle. The
latest bounce on the 3.55 support led to a
rally into the minor downward trendline where
the price got rejected. This where we can expect the sellers to step in with a
defined risk above the trendline to position for a drop into the support aiming
for a breakout. The buyers, on the other hand, will want to see the price
breaking higher to invalidate the bearish setup and increase the bullish bets
into the next major trendline around the 3.75 level.

Copper Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the buyers
failed to break out of the trendline on their first try as the price fell back
below it. The price is now bouncing on the upward trendline where we can find
the confluence with the
50% Fibonacci retracement level
and the red 21 moving average. This is
where the buyers should step in with a defined risk below the trendline and
target a breakout. The sellers, on the other hand, will want to see the price
breaking lower to invalidate the bullish setup and increase the bearish bets
into the 3.55 support.

Copper Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that
Copper is now consolidating between the resistance around the 3.68 level and
the support around the 3.66 level. A breakout on either side should lead to a
strong and sustained move, so the market participants will be watching it

Upcoming Events

This week, we will get lots of tier one data points with
the US labour market and the FOMC decision in focus. Today we will get the US
ADP, the ISM Manufacturing PMI, the Job Openings data and the FOMC rate
decision. Tomorrow, we will see the US Jobless Claims data, while on Friday we
conclude the week with the US NFP report and the ISM Services PMI. Weak data is
likely to weigh on Copper as recessionary fears will come back.

This article was written by FL Contributors at

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