On the daily chart below, we can see that since the reopening rumors/news in China in November 2022, copper has risen strongly as the market expected more demand for the metal also keeping in mind that China is the world’s largest copper importer and consumer. Those expectations are beginning to recede as factory recovery in China continues to disappoint and China’s copper imports decline even in Q1 2023. We are also seeing a downturn in global manufacturing and today’s Chinese manufacturing PMI is not brightening the picture.
All of the above, has dismantled the “china trade reopening” and we are now almost back where we are back in November 2022. We can see that copper has recently bounced on a major trendline and swing low support at $3.5475 but the bias remains skewed to the downside.
Copper technical analysis
Cooper Daily
On the 4 hours chart below, we can see that the recent sell-off to the $3.5475 support level has diverged with MACD. This is generally a sign of weak momentum and is often followed by pullbacks or reversals. It looks like copper has already pulled back towards the downtrend line but may not reach it given today’s Chinese Manufacturing PMI report.
If the price can rise, then the next resistance would be the swing top at $3.7760 which should be the sellers’ last line of defense as any further upward move should change the overall trend. A break below the key support level at $3.5475 would open the door for a bigger decline in the $3.23 region.
copper 4 hours
On the hourly chart below, we can see that we have a support area at the $3.63 level. There is also a 50% Fibonacci retracement level of confluence and a potential double bottom. Buyers are likely to count on this level with specific risk below it and resistance at $3.7760 as a target.
More conservative buyers may want to wait for the price to take out the last swing high at $3.6705 before building up. On the other hand, sellers will want to see the price break down to jump on board and extend the decline towards the $3.5475 support with a view to a breakout and new lower lows after that.
Copper 1 hour