Copper continues to rally supported by favourable fundamentals. In fact, the Chinese PMIs last week showed a strong improvement and the US ISM Manufacturing PMI jumped into expansion for the first time since 2022. Moreover, The PBoC is expected to deliver more policy support this year while the other central banks continue to foresee rate cuts in the near future. The pickup in economic activity and the dovish central banks should support the market until we get some slowdown, or the central banks turn back hawkish.
Copper Technical Analysis – Daily Timeframe
On the daily chart, we can see that Copper is starting to find some resistance around the key 4.35 level. From a risk management perspective, the buyers will have a much better risk to reward setup around the 4.18 level where we can also find the confluence of the 38.2% Fibonacci retracement level, the red 21 moving average and the trendline. The sellers, on the other hand, will likely step in around these levels to position for a drop into the trendline and eventually target a break below it.
Copper Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the recent rally diverged with the MACD, which is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, the target for the pullback should stand right around the 4.18 support, although the price will need first to break below the black minor trendline to confirm it. The buyers will likely lean on the minor trendline and the red 21 moving average to position for a break above the 4.35 resistance. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into new lows.
Copper Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the bullish setup around the 4.28 level where we have the confluence of the trendline, the 4-hour 21 moving average and the 38.2% Fibonacci retracement level. The buyers will look for a bounce while the sellers will want to see a break.
Upcoming Events
Today we get the US CPI report and the FOMC Minutes. Tomorrow, we will have the US PPI and the latest US Jobless Claims figures. On Friday, we conclude the week with the University of Michigan Consumer Sentiment Survey.
