Fundamental Overview
Copper has been on a sustained downtrend since reaching its peak in May. More recently we’ve been seeing some life coming back into the market with an increase in the bullish momentum last week as the mining giant BHP said on last Tuesday that it had started removing workers on strike at its Escondida copper mine in Chile.
In the big picture, stable global growth and major central banks cutting rates into resilient economies should be bullish drivers for the copper market and more expansionary policies from Chinese officials might give an even stronger boost. The timing though is the trickiest part.
Copper Technical Analysis – Daily Timeframe
On the daily chart, we can see that copper pulled back into a key level at 4.24 where we can find the confluence of the previous swing high, the trendline and the 38.2% Fibonacci retracement level. This is where we can expect the sellers to step in with a defined risk above the level to position for a drop into the 3.80 level. The buyers, on the other hand, will want to see the price breaking higher to pile in and position for a rally into the 4.68 level next.
Copper Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that in case we get a pullback from the 4.24 resistance, the buyers will likely lean on the upward trendline around the 4.14 level to position for a break above the resistance with a better risk to reward setup. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 3.80 level.
Copper Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a minor support zone around the 4.19 level. We can expect the buyers to lean on it to position for a break above the key resistance, while the sellers will look for a break lower to pile in for a drop into the trendline around the 4.14 level. The red lines define the average daily range for today.
Upcoming Catalysts
On Thursday we get the US Jobless Claims figures and the US PMIs. On Friday we conclude with Fed Chair Powell speaking at the Jackson Hole Symposium.