The copper market remains in a tight spot. The Chinese data continues to improve amid more support from the Chinese officials while the future outlook of the global economy is weakening given the tighter financial conditions and some early cracks in the labour markets. The technicals should be more helpful here as we have defined levels and breakouts will point to the most likely direction.
Copper Technical Analysis – Daily Timeframe
On the daily chart, we can see that Copper after breaking out of the symmetrical triangle got stuck in a descending triangle defined by the support around the 3.55 level and the top trendline. We recently got a fakeout below the support and a quick bounce back up as the buyers continue to target the top trendline amid resilience in the global economy and the improving Chinese data.
Copper Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that Copper is now trading in a range between the 3.55 support and the 3.68 resistance where we have also a trendline for confluence. We can expect the sellers to lean on the resistance with a defined risk above it to target the support and ultimately a downside breakout. The buyers, on the other hand, will want to see the price breaking above the resistance to increase the bullish bets and target the major trendline around the 3.75 level.
Copper Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a good support zone around the 3.63 level where we have the confluence with the trendline and the 50% Fibonacci retracement level. This is where we can expect the buyers to step in with a defined risk below the trendline to target the resistance and eventually a breakout. The sellers, on the other hand, will want to see the price breaking lower to pile in and target the support.
Tomorrow we will see the latest US Jobless Claims data with the market likely focusing on the Continuing Claims figures as they’ve missed expectations two times in a row already and might be a signal that the labour market is weakening. Weak jobless claims could weigh on Copper, while good data is likely to support it. On Friday, we will get the US PCE report which is unlikely to change anything for the near-term policy outlook.