Copper has been consolidating for over a week now as the market awaits key economic releases. The Chinese PMIs today missed expectations across the board with the Manufacturing sector sliding further into contraction and the Services measure falling but holding on in expansion. This might trigger some profit taking at these levels, although the market might also look forward to even more policy support. The focus now will switch to the US data as we head towards the FOMC rate decision on the 13th of December.
Copper Technical Analysis – Daily Timeframe
On the daily chart, we can see that Copper broke out of the triangle defined by the first blue trendline but found resistance at the second trendline formed using the fakeout from August. The price started to consolidate as the sellers are likely piling in with a defined risk above the high targeting a drop back into the 3.55 support. The buyers, on the other hand, will want to see the price continuing higher to increase the bullish bets into the swing level at 4.03.
Copper Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that from a risk management perspective, the buyers would have a much better risk to reward setup at the upward trendline where they will also find the confluence with the broken downward trendline and the 61.8% Fibonacci retracement level. The sellers, on the other hand, will want to see the price breaking below the trendline to increase the bearish bets into the key support.
Copper Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the rangebound price action that’s been going on for over a week now. This gives us two key levels to watch out for: the resistance at 3.86 and the support at 3.78. A break to the upside should trigger another bullish wave with the buyers targeting the 4.03 level. Conversely, a break to the downside should see the sellers increasing their bearish bets into the upward trendline with a further break lower likely leading to a drop into the 3.55 support.
Upcoming Events
Today we will get the US PCE and US Jobless Claims data with the market likely focusing more on the Jobless Claims figures given that we already saw the latest inflation data with the US CPI report just two weeks ago. Tomorrow, we conclude the week with the US ISM Manufacturing PMI which missed expectations by a big margin the last time. Weak data is likely to weigh on Copper, while strong figures should continue to offer support.
