Copper has been falling steadily as global growth fears continue to be the market’s main focus. The market couldn’t even get some help from the Chinese central bank as officials decided to keep rates unchanged despite expectations of a cut. Moreover, the advanced economies keep on pushing back against the aggressive rate cuts expectations with monetary conditions tightening up again. The big picture outlook remains bearish but in the short term we might get some relief rally, especially if China eventually decides to ease more aggressively to spur growth.
Copper Technical Analysis – Daily Timeframe
On the daily chart, we can see that Copper is now approaching the key support zone around the 3.73 level where we can find the 50% Fibonacci retracement level for confluence. This is where we can expect the buyers to step in with a defined risk below the support to position for a rally into the 4.03 level. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 3.55 level.
Copper Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price is now in the support zone and we can also notice that we have a divergence with the MACD, which is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, we should see at least a pullback into the trendline where two different scenarios may happen:
- The sellers will likely lean on the trendline with a defined risk above it to position for a break below the support.
- The buyers will want to see the price breaking higher to invalidate the bearish setup and increase the bullish bets into the 4.03 resistance.
Copper Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the current price action with the price at the key support zone. What happens around this level will likely decide where the price will go in the next few weeks or even months.
Upcoming Events
Today, we will get the US Retail Sales and Industrial Production data, while tomorrow we will see the latest US Jobless Claims figures. On Friday, we conclude the week with the University of Michigan Consumer Sentiment survey. Weak data is likely to weigh on Copper as demand fears would grow even stronger. On the other hand, strong figures might keep the market supported.
