Copper has erased all the gains from the PBoC RRR cut announcement and extended the drop into new lows as the market is clearly demanding more easing measures from China. The recent reacceleration in the US economy and the end of the tightening cycle are supportive for the metal but we will likely need that final help from China to really get things going. Watch out for the next PBoC rate decisions on Friday and next Tuesday as rate cuts will likely trigger a rally in Copper.
Copper Technical Analysis – Daily Timeframe
On the daily chart, we can see that Copper broke through the key support around the 3.73 level and it’s now consolidating waiting for a catalyst. The buyers should step in around these levels to position for a rally into the 4.03 level, while the sellers will likely keep on selling the rallies as long as the price continues to print lower lows and lower highs.
Copper Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price recently broke through the downward trendline which was defining the strong bearish momentum and managed to print a new higher high. The buyers are not out of the woods yet as they will need the price to break above the 3.77 level to make a new higher high and change the short-term trend structure. The sellers, on the other hand, will want to see the price breaking below the recent low to increase the bearish bets into new lows.
Copper Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the we have a minor upward trendline now where the price is bouncing off from. This is where the buyers should step in with a defined risk below the trendline to position for a break above the 3.77 level. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into new lows.
Upcoming Events
Tomorrow we will see latest US Jobless Claims figures and the US Retail Sales data, while on Friday, we conclude the week with the PBoC MLF rate decision and later in the day the US PPI and the University of Michigan Consumer Sentiment survey. Weak data is likely to weigh on Copper in the short term, while strong figures should give it a boost.
