Copper Technical Analysis

Copper retreated from the
highs as the market will likely want to retest the previous resistance now
turned support before continuing higher. On the fundamental side, not much has
changed as the central banks are still intentioned to deliver the first rate
cuts with the PBoC maintaining its dovish language. The recent economic data
has been showing resilient growth and the leading indicators started to turn
higher as the expectations of rate cuts boosted economic sentiment. As long as
the current theme remains in place, we can expect the market to trend higher.

Copper Technical Analysis –
Daily Timeframe

On the daily chart, we can see that Copper is now
near a key support
zone around the 3.98 level where we can find the confluence
of the trendline,
the 50% Fibonacci
retracement level and the red 21 moving
average. This is where we can expect the buyers to step in with a defined
risk below the trendline to position for a rally into new highs. The sellers,
on the other hand, will want to see the price breaking lower to invalidate the
bullish setup and increase the bearish bets into the 3.70 level.

Copper
Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see more closely the
bullish setup around the support zone where the buyers will look for a bounce
and the sellers for a break. If we do get a bounce, the sellers will likely
lean on the downward trendline where they can position for a break below the
major trendline with a better risk to reward setup. The buyers, on the other
hand, will want to see the price breaking above the downward trendline to increase
the bullish bets into new highs.

Copper Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the price
is starting to diverge with
the MACD as it approaches
the key support zone. This is generally a sign of weakening momentum often
followed by pullbacks or reversals. In this case, it could be another bullish
signal for the buyers and should give them more confidence to pile in around
these levels. If the price were to break lower though, it will be an even
stronger signal of a continuation of the downtrend and we can expect the bearish
momentum to increase.

Upcoming Events

Today we have Fed’s Waller speaking where the market
will want to see if he sounds hawkish after the recent economic data. Tomorrow,
we get the latest US Jobless Claims figures, while on Friday we conclude with
the US PCE and Fed Chair Powell. Weak data is likely to weigh on Copper, while
strong figures should give it a boost.

This article was written by FL Contributors at www.forexlive.com.