Fundamental
Overview
Copper has been on
a sustained downtrend since reaching its peak in May. A lot of the weakness has
been attributed to the struggling economic recovery in China.
Copper is
sensitive to the manufacturing cycle, and after a pickup in the first half of
the year, we’ve been seeing a notable pullback as tight monetary policy
continued to weigh.
That could reverse
in the next months as the Fed is finally starting its easing cycle today. A 50
bps cut would be better in the bigger picture as it would indicate that the Fed
wants to get ahead. More easing from the Chinese officials would also boost the
copper market.
Copper
Technical Analysis – Daily Timeframe
Copper Daily
On the daily chart, we can
see that copper broke above the major trendline and after a retest, rallied back to
the 4.32 level. This level is acting as a strong resistance.
We can expect the sellers to step in here with a defined risk above the level
to position for a drop into new lows. The buyers, on the other hand, will want
to see the price breaking higher to increase the bullish bets into the 4.70
level.
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
buyers will likely keep on leaning on the trendline to position for new highs,
while the sellers will want to see the price breaking lower to increase the
bearish bets into new lows.
Copper Technical
Analysis – 1 hour Timeframe
Copper 1 hour
On the 1 hour chart, we can
see that the price action has been rangebound between the 4.25 support and the
4.32 resistance. The buyers will want to see the price breaking to the upside
to increase the bullish bets into new highs, while the sellers will look for a
break lower to position for a drop into new lows. The red lines define the average daily range for today.
Upcoming
Catalysts
Today, we have the FOMC Rate Decision and tomorrow, we get the latest US
Jobless Claims figures.