Copper has been selling off ever since the “China reopening” trade started to fall apart. The economic data from China kept on disappointing and the inaction from the officials hadn’t helped either. Recently though we started to get news of more economic easing coming and in fact we got rate cuts on all fronts from the PBOC. The expectations of more demand spurred by more stimulus gave the market a reason to bid up the price of copper as China is the largest copper importer and consumer in the world.
Copper Technical Analysis – Daily Timeframe
On the daily chart, we can see that copper has recently bounced from the trendline and the support at 3.5475. The strong rally has also led to a break above the resistance at 3.8245 and the next target now is the 4.00 round number. That’s where we should find the sellers leaning on the resistance targeting the 3.8245 support first and the 3.5475 level afterwards.
Copper Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a trendline that should support the uptrend into the 4.00 resistance. From a risk management perspective, the buyers would be better off waiting for a pullback into the trendline now before trying new long positions, while the sellers should wait for a break below the 3.8245 level to get the conviction to target the 3.5475 support.
Copper Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the support level at 3.8245 has also the 50% Fibonacci retracement level for further confluence. The buyers though may even opt to lean on the 38.2% Fibonacci level and the trendline to start positioning for a rally. For now, it’s a buyers’ market, so the sellers should wait for a break below the 3.8245 support before considering shorts.
