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
Copper Daily
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
Copper 4 hour
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
Copper 1 hour
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.