Fundamental Overview
Last Friday, the PBoC announced new easing measures which included further rate cuts and stock buyback funding. Moreover, we got some positive economic data with Retail Sales and Industrial Production beating expectations by a big margin. These catalysts provided support for copper which erased most of last week’s losses.
Copper Technical Analysis – Daily Timeframe
On the daily chart, we can see that copper bounced around the 4.32 support zone where we had also the 61.8% Fibonacci retracement level for confluence. This is where the buyers stepped in and then increased the bullish bets following the new easing measures announcement from the PBoC.
The sellers will want to see the price turning around and breaking below the 4.32 support to start targeting the trendline around the 4.20 level.
Copper Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price broke above the downward trendline increasing the bullish momentum as more buyers piled in. The first target should be the swing level at 4.51 which the buyers will need to break to extend the rally into the 4.70 resistance next. The sellers, on the other hand, will likely step in around the 4.51 level to position for a drop back into the 4.32 support.
Copper Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we now have a minor upward trendline defining the current bullish momentum. The buyers will likely keep on leaning on it to position for further upside, while the sellers will look for a break lower to position for a drop back into the 4.32 support. The red lines define the average daily range for today.
Upcoming Catalysts
This week is pretty empty on the data front with market moving releases scheduled for the latter part of the week. On Thursday, we get the Flash Japanese and US PMIs, and the US Jobless Claims figures.
