Copper started to rally in the final part of last week as traders positioned long into the PBoC interest rate decision. On Monday, the price fell a bit as the market got disappointed by the unchanged MLF setting. Yesterday though, the PBoC surprised delivering the biggest 5-yers LPR cut on record. This gave Copper a boost and we saw a strong rally ever since. Unless we start to get ugly US data, the market should remain supported going forward.
Copper Technical Analysis – Daily Timeframe
On the daily chart, we can see that Copper broke through the key support around the 3.73 level but bounced back as traders started to position into the PBoC rate decision. There was almost no pullback along the way and the target should be the 4.03 level. There’s not much else we can glean from this chart, so we need to zoom in to get some extra details.
Copper Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have now an upward trendline where we can also find the red 21 moving average for confluence. If we get a pullback, we can expect the buyers to lean on the trendline with a defined risk below it 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 target a drop back into the lows.
Copper Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the latest leg higher diverged with the MACD which is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, it could be a signal for a pullback into the trendline where we will also find the Fibonacci retracement levels for confluence. That’s where the buyers will look for a bounce and a rally, while the sellers will seek a breakdown and a selloff.
Upcoming Events
Today we have the FOMC Meeting Minutes on the agenda while tomorrow we will see the latest US Jobless Claims figures and US PMIs. Weak data is likely to weigh on Copper in the short term while strong figures should give it a boost.
