Fundamental Overview
Copper has bounced on a key support recently and extended the gains this week following the Chinese Caixin Manufacturing PMI as the survey hit the highest level since May 2021. In the last few weeks, the bearish momentum indeed appeared to be slowing as the lower lows became shallower.
All else being equal, if we continue to see the pickup in global growth, we could see new highs in the coming months. Indeed, more policy support from the Chinese officials would give the market a stronger boost.
Copper Technical Analysis – Daily Timeframe
On the daily chart, we can see that copper eventually bounced on the key 4.35 support where we had also the 50% Fibonacci retracement level for confluence.
That’s where the buyers stepped in with a defined risk below the level to position for a rally into a new all-time high. The sellers will want to see the price breaking below the 4.35 support to get back control and increase the bearish bets into the 4.00 level.
Copper Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have now an important level at 4.52, which is the most recent lower high. Technically, a break above it should change the bias from bearish to bullish and give the buyers more conviction to increase the bets into new highs.
The sellers, on the other hand, will likely step in around this level with a defined risk above it to position for a drop back into the 4.35 support targeting a break below it.
Copper Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a minor upward trendline defining the current bullish momentum. From a risk management perspective, the buyers will have a better risk to reward setup around the trendline where they will also find the 61.8% Fibonacci retracement level for confluence.
The sellers, on the other hand, will want to see the price breaking lower to pile in and target a drop below the key 4.35 support zone. The red lines define the average daily range for today.
Upcoming Catalysts
Today we get the US ADP, the US Jobless Claims, the US ISM Services PMI and the FOMC Meeting Minutes. Tomorrow is going to be a US Holiday for Independence Day. Finally, on Friday, we conclude the week with the US NFP report.
