Copper Technical Analysis

Copper extended the rally
into new highs despite some weaker US data lately. Overall, there are mixed
signals with the PBoC Governor Pan recently signalling more monetary
policy support to come on one hand, and the weakening US data on the other. The
technicals have been more helpful lately in pointing to the right direction as
key upside breakouts increased the bullish momentum.

Copper Technical Analysis –
Daily Timeframe

On the daily chart, we can see that Copper bounced
on the red 21 moving average as the
buyers started to pile in to position for a rally into the 4.03 level. The
price is now at the recent highs and we can expect a pullback as the sellers
will likely step in to position for a drop back into the lows.

Copper Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that we now have a
key upward trendline that is
defining the current uptrend. In case we get a bigger pullback, this is where
we can expect the buyers to step in with a defined risk below the trendline to
position into the 4.03 level with a better risk to reward setup. The sellers,
on the other hand, will want to see the price breaking lower to increase the
bearish bets into the 3.82 level.

Copper Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that we
have a resistance turned
support around the 3.95 level. This is where the buyers will
likely step in with a defined risk below the level to position for a rally into
the 4.03 level. The sellers, on the other hand, will want to see the price
breaking lower to target the major upward trendline and eventually a break
below it.

Upcoming Events

Tomorrow we get the US PPI, the US Retail Sales and the
US Jobless Claims figures. On Friday, we conclude the week with the University
of Michigan Consumer Sentiment survey. Strong data is likely to support Copper,
while weak figures should send the prices lower.

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