Copper continues to trade within a major triangle as the uncertainty around the global economy remains high. In fact, on one hand we have the Chinese trying to stimulate the economy with the recent economic indicators showing positive signs, while on the other hand, we have the other major economies weakening due to restrictive monetary policies and inflationary pressures. As long as the picture remains so mixed, we are likely to continue to see a rangebound price action.
Copper Technical Analysis – Daily Timeframe
On the daily chart, we can see that Copper continues to trade within the symmetrical triangle with the price recently trying some downside breakouts. There is still lots of uncertainty around the global economy, so we are likely to keep on seeing this choppy price action until something big happens that points clearly into a certain direction. For now, traders should keep a close eye on this pattern as a breakout might lead to a big move.
Copper Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price recently bounced on the lower bound of the triangle and tried a rally into the upper bound. The price failed to reach it completely and sold off into the lower bound again. To avoid fakeouts, we have another trendline connecting the most recent failed breakouts. If the price falls below the trendline, then we are likely to get a real breakout and the sellers should pile in aggressively to ride the big bearish wave.
Copper Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price bounced on the trendline and it’s now approaching the downward trendline where we have also the confluence with the 38.2% Fibonacci retracement level. This is where we can expect the sellers to pile in with a defined risk above the trendline to try again another breakout. The buyers, on the other hand, will want to see the price breaking above the trendline to position for a rally into the upper bound of the triangle.
Upcoming Events
This week has a few important economic releases that can have an impact on Copper. Today, the Fed is expected to keep rates unchanged with the market focusing more on the Dot Plot and Powell’s press conference, where he’s likely to reaffirm their data dependency. Tomorrow, we will get the latest US Jobless Claims report and much worse than expected data should weigh on Copper while better than expected figures are likely to keep it supported. Finally on Friday we conclude the week with the PMIs data for many major economies like the US, Eurozone and the UK. Again, weak data is likely to send the markets into risk off and lead to weakness in Copper, while strong data should provide some relief.
