Fundamental Overview
Copper recently got a boost from the Chinese Politburo announcement that it will adopt a “moderately loose” strategy for monetary policy for 2025 and will seek a “more proactive” fiscal policy.
These were key changes in the language that triggered a rally in Chinese stocks and commodity linked markets. Unfortunately, as it’s been the case for quite some time, the moves were reversed, and we got back to square one pretty quickly.
Nevertheless, this was a strong shift, and the market might just be waiting for the Chinese to walk the talk this time around. On Friday, we have the PBoC LPR decision and big rate cuts might trigger another rally in copper.
Copper Technical Analysis – Daily Timeframe
On the daily chart, we can see that copper couldn’t break above the key resistance around the 4.31 level where we had also the trendline for confluence. The sellers stepped in with a defined risk above the resistance to position for a drop into the major trendline around the 3.90 level. The buyers will now look for buying opportunities on the lower timeframes but a break above the key resistance should open up for a rally into the 4.70 level next.
Copper Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we had also an upward trendline defining the bullish momentum that once got broken, opened the way for new lows as the sellers piled in more aggressively and the buyers folded.
We are now bouncing from another upward trendline and if we get a pullback into it again, we can expect the buyers to try once again for a rally into the 4.31 resistance. The sellers, on the other hand, will want to see the price breaking below the major upward trendline to increase the bearish bets into new lows.
Copper Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a downward trendline defining the current bearish momentum on this timeframe. The sellers will likely lean on it to position for a break below the major trendline, while the buyers will look for a break higher to increase the bullish bets into the key resistance. The red lines define the average daily range for today.
Upcoming Catalysts
Today, we have the FOMC Policy Decision. Tomorrow, we get the latest US Jobless Claims figures. On Friday, we conclude the week with the PBoC LPR decision and the US PCE data.
