Copper Technical Analysis

Copper continues to rally
supported by favourable fundamentals. In fact, the Chinese PMIs last week showed a strong
improvement and the US ISM Manufacturing PMI jumped into expansion for the first
time since 2022. Moreover, The PBoC is expected to deliver more policy support
this year while the other central banks continue to foresee rate cuts in the
near future. The pickup in economic activity and the dovish central banks
should support the market until we get some slowdown, or the central banks turn
back hawkish.

Copper Technical Analysis –
Daily Timeframe

On the daily chart, we can see that Copper is
starting to find some resistance around 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
38.2% 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 recent
rally diverged 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 should stand right around
the 4.18 support,
although the price will need first to break below the black minor trendline to
confirm it. The buyers will likely lean on the minor trendline and the red 21
moving average to position for a break above the 4.35 resistance. The sellers,
on the other hand, will want to see the price breaking lower to increase the
bearish bets into new lows.

Copper Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see more
closely the bullish setup around the 4.28 level where we have the confluence of
the trendline, the 4-hour 21 moving average and the 38.2% Fibonacci retracement
level. The buyers will look for a bounce while the sellers will want to see a
break.

Upcoming Events

Today we get the US CPI report and the FOMC Minutes.
Tomorrow, we will have the US PPI and the latest US Jobless Claims figures. On
Friday, we conclude the week with the University of Michigan Consumer Sentiment
Survey.

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