Basic Overview
Copper has been rallying on key support recently and extended gains this week after China’s Caixin manufacturing PMI was released as the survey hit its highest level since May 2021. Over the past few weeks, the downward momentum has already appeared to be slowing as lower lows have become shallower.
If the global growth recovery continues, we could see fresh highs in the coming months. In fact, more policy support from Chinese officials would give the market a stronger boost.
Copper Technical Analysis – Daily Time Frame
Copper daily
On the daily chart, we can see that copper eventually bounced to the major support level of 4.35 where we also had the 50% Fibonacci retracement level to converge.
Here buyers step in with the risk set below the level for a move to a new record high. Sellers want to see the price break the support level of 4.35 to regain control and increase bearish bets to the level of 4.00.
Copper Technical Analysis – 4 Hour Time Frame
Copper 4 hours
On the 4-hour chart, we can see that we now have an important level at 4.52, which is the stock’s recent high. Technically, a break above it should change the bias from bearish to bullish and give buyers more confidence to increase bets towards new highs.
On the other hand, sellers are likely to step in around this level with risks defined above it to position themselves ready to drop back to the 4.35 support level and target a break below it.
Copper Technical Analysis – 1 Hour Time Frame
Copper 1 hour
On the 1-hour chart, we can see that we have a slight uptrend line that defines the current bullish momentum. From a risk management perspective, buyers will have a better risk-reward setup around the trend line where they will also find the 61.8% Fibonacci retracement level to meet.
On the other hand, sellers will want to see the price drop to a lower level in order to enter long trades and target a decline below the key support area of 4.35. The red lines mark the average daily range for the day.
Upcoming incentives
Today, we get the US ADP data, US unemployment claims, US ISM services PMI and FOMC minutes. Tomorrow is a holiday in the US for Independence Day. Finally, on Friday, we wrap up the week with the US non-farm payrolls report.