Copper erased all the gains from the surprising PBoC 5-yers LPR cut in late February and got stuck in a consolidation waiting for the next catalyst. The recent US ISM PMIs further depressed the sentiment, especially the big miss in the Manufacturing PMI, which is a leading indicator for many commodities. Today, the PBoC Governor Pan signalled more monetary policy support to come, and although this is a bullish driver, the weakness in the US PMIs makes things trickier. The technicals should help going forward as the break of key levels will likely give the market participants a hint on the next possible direction.
Copper Technical Analysis – Daily Timeframe
On the daily chart, we can see that Copper consolidated above the red 21 moving average recently with the buyers piling in to position for a rally into the 4.03 level. We got some weak US ISM PMIs recently which is putting a lid on the upside despite some positive drivers in China with the PBoC signalling more monetary policy support to come in the near future.
Copper Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more clearly the consolidation between the 3.82 and 3.86 levels. The price action has been pretty choppy giving traders some headaches with fake breakouts. Nonetheless, if the price breaks to the upside we can expect the buyers to continue bidding up the market to target the 4.03 level. Conversely, a break to the downside, should see the sellers increasing the bearish bets into the 3.73 level.
Copper Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a counter-trendline where the price today got rejected from. A successful breakout should confirm the upside and increase the bullish momentum into the highs. Another failure though will likely take the price back to the 3.82 lows.
Upcoming Events
Today we have the US ADP, the US Job Openings and the Fed Chair Powell speaking. Tomorrow, we get the latest US Jobless Claims figures, while on Friday we conclude the week with the US NFP report. Weak data is likely to weigh on Copper, while strong figures should give it a boost.
