Copper broke out of the triangle in the first part of the week and triggered a rally into the next resistance defined by a trendline. The recent positive Chinese activity data could have been the catalyst for the breakout which triggered momentum buyers to join the bullish wave. Overall, the picture is still murky, and the global growth outlook is more likely to weaken with the central banks keeping monetary conditions tight.
Copper Technical Analysis – Daily Timeframe
On the daily chart, we can see that Copper broke out of the triangle in the first part of the week and rallied into the trendline formed with the fakeout from last August. The price got rejected at the first try as the rally was a bit overstretched and needed a bit of a pullback. We can expect the sellers to keep leaning on this trendline to position for a drop back into the 3.55 support.
Copper Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that after the rejection the price bounced on the upward trendline where there was also the 50% Fibonacci retracement level for confluence. The buyers will want to see the price breaking above the major downward trendline to increase the bullish bets into the 3.90 level. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 3.55 support.
Copper Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the current price action. We will likely see some consolidation inside these key levels with market participants waiting for a breakout. The playbook looks clear though: a break to the upside is likely to lead to a rally into the 3.90 level, while a break to the downside should trigger a correction at least into the 3.75 support.
Upcoming Events
Today the US will be on holiday for Thanksgiving Day and therefore the liquidity in the market will be thinner. Tomorrow, we conclude the week with the US PMIs where weaker data is likely to put some pressure on Copper, while strong figures should support it in the short-term.