Copper continues to consolidate inside the descending triangle as the uncertainty in the market around the future outlook remains high. The recent activity data from China has been positive as Industrial Production and Retail Sales beat expectations, but the overall global outlook looks less optimistic. The central banks are resolute to keep monetary conditions tight even in the face of slowing data and softening labour markets. For now, Copper is likely to continue to trade inside the triangle until we finally get a breakout supported by a meaningful fundamental development.
Copper Technical Analysis – Daily Timeframe
On the daily chart, we can see that Copper is still trading inside the major descending triangle pattern. The price recently rallied back to retest the key trendline and it looks like this will be a crucial moment for Copper. In fact, we can expect the sellers to step in here to position for a drop into the 3.55 support, while the buyers will want to see a breakout to target the 3.90 resistance.
Copper Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more closely the recent price action and we can notice that we got what looks like a fakeout today. This is generally a reversal pattern, so the sellers are likely to gain even more conviction for a drop into the 3.55 support. The buyers will need the price to break above the trendline with conviction to invalidate the bearish setup.
Copper Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price is diverging with the MACD right at the key resistance zone. This is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, it might be another layer of bearish confluence for the sellers. In fact, a break below the minor upward trendline should confirm the reversal and increase the bearish momentum into the 3.55 support. The buyers, on the other hand, are likely to lean on the trendline to position for a breakout and fold quickly if the price was to break lower.
Upcoming Events
Today the market’s focus will be on the latest US Jobless Claims figures given the recent softening in the labour market data. Strong data might support Copper in the short term, but weak figures should lead to new lows.
