Copper has been selling off
ever since the “China reopening” trade started to fall apart. The economic data
from China kept on disappointing and the inaction from the officials hadn’t
helped either. Recently though we started to get news of more economic easing
coming and in fact we got rate cuts on all fronts from the PBOC. The
expectations of more demand spurred by more stimulus gave the market a reason
to bid up the price of copper as China is the largest copper importer and
consumer in the world.
Copper Technical Analysis –
Daily Timeframe
On the daily chart, we can see that copper has
recently bounced from the trendline and the support at
3.5475. The strong rally has also led to a break above the resistance at 3.8245
and the next target now is the 4.00 round number. That’s where we should find
the sellers leaning on the resistance targeting the 3.8245 support first and
the 3.5475 level afterwards.
Copper Technical Analysis –
4 hour Timeframe
On the 4 hour chart, we can see that we have a
trendline that should support the uptrend into the 4.00 resistance. From a risk
management perspective, the buyers would be better off waiting for a pullback
into the trendline now before trying new long positions, while the sellers
should wait for a break below the 3.8245 level to get the conviction to target
the 3.5475 support.
Copper Technical Analysis –
1 hour Timeframe
On the 1 hour chart, we can see that the
support level at 3.8245 has also the 50% Fibonacci
retracement level for further confluence. The
buyers though may even opt to lean on the 38.2% Fibonacci level and the
trendline to start positioning for a rally. For now, it’s a buyers’ market, so
the sellers should wait for a break below the 3.8245 support before considering
shorts.
This article was written by FL Contributors at www.forexlive.com. Source