Fundamental Overview
Last week, the PBoC announced lots of easing measures ranging from short to long term interest rates cuts. Copper rallied strongly as China makes up for more than 50% of copper demand. Things are starting to look better for the market as we have also the Fed cutting rates into a resilient economy.
Central bank easing generally leads the manufacturing cycle, so we can expect global growth to pick up. All these reasons should be bullish for the market and support prices in the next months (barring a recession).
Copper Technical Analysis – Daily Timeframe
On the daily chart, we can see that copper rallied all the way up to the 4.70 level following the Chinese easing measures. This is where we can expect the sellers to step in with a defined risk above the level to position for a pullback into the 4.32 level. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into the cycle high.
Copper Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have an upward trendline defining the current bullish momentum. The price is dipping below the trendline as the momentum lost a bit of steam, but the sellers will need to break below the most recent higher low at 4.58 to gain more conviction for new lows. The buyers, on the other hand, will likely buy the dip around these levels to position for a break above the 4.70 level.
Copper Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more clearly the loss of momentum although the bullish structure remains intact. The next big event will be the US ISM Manufacturing PMI tomorrow. The red lines define the average daily range for today.
Upcoming Catalysts
Today we have Fed Chair Powell speaking. Tomorrow, we get the US ISM Manufacturing PMI and the US Job Openings data. On Wednesday, we have the US ADP report. On Thursday, we get the latest US Jobless Claims figures and the US ISM Services PMI. Finally, on Friday, we conclude the week with the US NFP report.