Copper Technical Analysis

Copper erased almost all
the gains from the surprising PBoC 5-yers LPR cut. Nothing has changed though, so
this could be a great opportunity for those who missed the rally to position
for new highs. Overall, the data has been good, and the central banks are still
looking to ease their monetary policies which should keep on supporting the
commodity. As long as global growth remains resilient, we can expect the bias
to remain bullish.

Copper Technical Analysis –
Daily Timeframe

On the daily chart, we can see that Copper pulled
back into the red 21 moving average. The
price bounced here as the buyers started to pile in to position for another
rally into new highs. We can see that we are basically in the middle of a big
range between the 3.72 support and the
3.95 resistance, so we need to zoom in to see some more details.

Copper Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the price
yesterday broke above the downward trendline and
extended the rally into the most recent higher high at 3.86 where we can also
find the 38.2% Fibonacci retracement level
for confluence. This is
where we can expect the sellers to step in with a defined risk above the level
to position for a drop into new lows. 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 4.00 handle.

Copper Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
latest leg lower diverged with
the MACD which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, it led to a pullback into the 3.86 resistance. A break
above the resistance should confirm the reversal and give the buyers even more
conviction for a rally into new highs. The sellers, on the other hand, will
want to see the price breaking below the minor upward trendline to invalidate
the bullish bias and increase the bearish bets into new lows.

Upcoming Events

Today we will see the US PCE and the latest US
Jobless Claims figures, while tomorrow we conclude the week with the Chinese
PMIs and the US ISM Manufacturing PMI. Weak data is likely to weigh on Copper
in the short term while strong figures should give it a boost.

This article was written by FL Contributors at

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