Copper Technical Analysis | Forexlive

Copper erased all the gains
from the surprising PBoC 5-yers LPR cut in late February and got stuck in a
consolidation waiting for the next catalyst. The recent US ISM PMIs further
depressed the sentiment, especially the big miss in the Manufacturing PMI,
which is a leading indicator for many commodities. Today, the PBoC Governor Pan signalled more monetary policy
support to come, and although this is a bullish driver, the weakness in the US
PMIs makes things trickier. The technicals should help going forward as the
break of key levels will likely give the market participants a hint on the next
possible direction.

Copper Technical Analysis –
Daily Timeframe

On the daily chart, we can see that Copper consolidated
above the red 21 moving average recently
with the buyers piling in to position for a rally into the 4.03 level. We got
some weak US ISM PMIs recently which is putting a lid on the upside despite
some positive drivers in China with the PBoC signalling more monetary policy
support to come in the near future.

Copper Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see more clearly the
consolidation between the 3.82 and 3.86 levels. The price action has been
pretty choppy giving traders some headaches with fake breakouts. Nonetheless,
if the price breaks to the upside we can expect the buyers to continue bidding
up the market to target the 4.03 level. Conversely, a break to the downside,
should see the sellers increasing the bearish bets into the 3.73 level.

Copper Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that we
have a counter-trendline where
the price today got rejected from. A successful breakout should confirm the
upside and increase the bullish momentum into the highs. Another failure though
will likely take the price back to the 3.82 lows.

Upcoming Events

Today we have the US ADP, the US Job Openings and
the Fed Chair Powell speaking. Tomorrow, we get the latest US Jobless Claims
figures, while on Friday we conclude the week with the US NFP report. Weak data
is likely to weigh on Copper, while strong figures should give it a boost.