Copper continues to be supported by favourable fundamentals although the latest rally is starting to look a bit exhausted. The supporting factors include the recent beat in the Chinese PMIs and the US ISM Manufacturing PMI, with the latter jumping into expansion for the first time since 2022. Moreover, we have the PBoC expected to deliver more policy support this year while the other central banks continue to foresee rate cuts at some point although they are willing to keep rates higher for longer if needed. The current environment should be good for growth, so the things to watch will be signs of marked deceleration in growth indicators or increased risks of rate hikes.
Copper Technical Analysis – Daily Timeframe
On the daily chart, we can see that Copper has been struggling to break 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 50% 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 price has been diverging 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 would come right around the base of the divergent formation near the 4.18 support, although the price will need first to break below the black minor trendline to confirm it.
Copper Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price rejected the 4.35 level and it’s now falling back to the minor trendline. The buyers will have another opportunity to step in around the trendline to position for a break above the 4.35 resistance. If the price were to break lower though, the sellers will gain control and take the price into the 4.18 support.
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