Basic overview
Last week, the People’s Bank of China (PBoC) announced a lot of easing measures ranging from short-term and long-term interest rate cuts. Copper rose strongly as China accounts for more than 50% of copper demand. Things are starting to look better for the market as the Fed also cut interest rates to keep the economy resilient.
Central bank easing generally drives the manufacturing cycle, so we can expect global growth to rebound. All of these reasons should be bullish for the market and support prices in the coming months (barring a recession).
Copper technical analysis – daily time frame
Copper daily
On the daily chart, we can see that copper rose all the way to the 4.70 level after China’s easing measures. This is where we can expect sellers to step in with specific risks above the level in order to prepare for a pullback to the 4.32 level. On the other hand, buyers will want to see the price rise higher to increase bullish bets at the highs of the cycle.
Copper technical analysis – 4-hour time frame
Copper 4 hours
On the 4-hour chart, we can see that we have a bullish trend line outlining the current bullish momentum. The price is falling below the trend line as momentum has lost some steam, but sellers will need to break below the most recent high at 4.58 to get more conviction on new lows. On the other hand, buyers are likely to buy the dip around these levels to position themselves for a break above the 4.70 level.
Copper Technical Analysis – 1 hour time frame
Copper 1 hour
On the 1-hour chart, we can see more clearly the loss of momentum even though the bullish structure remains in place. The next big event will be the US ISM Manufacturing PMI tomorrow. The red lines mark the average daily range for the day.
Upcoming stimuli
Today we have Fed Chairman Powell speaking. Tomorrow we will get the US ISM Manufacturing PMI and US Jobs data. On Wednesday, we have the US ADP report. On Thursday, we will get the latest US unemployment claims numbers and the US ISM Services PMI. Finally, on Friday, we conclude the week with the US NFP report.