Copper Technical Analysis – Watch what happens around this key trendline

Copper continues to be tightly correlated with what
happens in China. In fact, we saw strong rallies following news of more policy
support from the Chinese authorities, but the ugly economic data eventually
prevailed on the sentiment and led to a big selloff. Yesterday, the PBoC finally decided to cut rates but Copper
sold off even more. The market may have wanted more as the rate cut was
followed by another set of very weak data.

Copper Technical Analysis –
Daily Timeframe

On the daily chart, we can see that since the
fakeout at the 3.9575 resistance, Copper
just kept on falling with very shallow pullbacks along the way. The price now
sits at a key trendline that
acted as support previously and a break below it would open the door for a fall
into the 3.5475 level.

Copper Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that Copper has
been trading within a regression channel and we should expect the buyers step
in here around the trendline to target a breakout of the channel and the 3.9575
resistance. The sellers, on the other hand, are likely to lean on the upper
bound of the channel where we can also find the red 21 moving average as
dynamic resistance to target a break below the trendline.

Copper Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that
Copper seems to be bottoming out at the trendline and the pullback should
extend to the upper bound of the channel at least. That’s where we will find
the sellers leaning on the Fibonacci
levels with a defined risk above the

Upcoming Events

This week is a
bit empty on the data front and the most important release will be the US
Jobless Claims tomorrow. Readings in line with expectations shouldn’t be market
moving but big deviations should offer strong reactions. In fact, in case we
see a big beat, we may see a pullback in Copper but it’s likely that the
hawkish expectations around interest rates will eventually prevail and push the
price back lower. On the other hand, a big miss is likely to cause recessionary
fears and lead to a selloff.

This article was written by FL Contributors at Source