The weakening global growth and the deteriorating Chinese economic data keep on weighing on Copper putting a lid on any rally. The Chinese authorities seem to be stepping up their policy support for the economy, so the market finds itself between bad and good news. This uncertainty has led to a consolidation, with the price action forming a symmetrical triangle. Fundamentally, the big picture is mixed but more skewed to the downside, so the technicals will be helpful as a breakout on either side might point into the right direction.

Copper Technical Analysis – Daily Timeframe

Copper Technical Analysis
Copper Daily

On the daily chart, we can see that Copper continues to trade within a symmetrical triangle. The latest leg higher got rejected from the top trendline and we should see the price now falling into the bottom trendline. Eventually, a breakout should give an amazing opportunity for the buyers or sellers as momentum generally picks up and the following moves are strong and sustained, so watch out for that.

Copper Technical Analysis – 4 hour Timeframe

Copper Technical Analysis
Copper 4 hour

On the 4 hour chart, we can see that the latest leg higher was also diverging with the MACD which is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, we should see the price falling back into the bottom trendline where we can also find the 61.8% Fibonacci retracement level and the previous swing low support. This is where we can expect the buyers to pile in again and ride the expected rally into the top trendline.

Copper Technical Analysis – 1 hour Timeframe

Copper Technical Analysis
Copper 1 hour

On the 1 hour chart, we can see that the sellers leant on the resistance zone around the 3.8450 level to position for a fall into the trendline around the 3.76 level. A break below the low at 3.8230 should see more sellers piling in and drive Copper into the support zone. The buyers, on the other hand, will need the price to break above the resistance at 3.8450 to try another rally into the top trendline and eventually a breakout.

Upcoming Events

This week is a bit empty on the data front with just the US ISM Services PMI today and the US Jobless Claims tomorrow being the main highlights. If we see strong data, the market is unlikely to price an imminent recession and thus it shouldn’t affect Copper too much. On the other hand, weak data should bring back recessionary fears and likely trigger some risk aversion in the markets eventually weighing on Copper.