Fundamental
Overview
Copper recently got a boost from the Chinese Politburo announcement that it will adopt a
“moderately loose” strategy for monetary policy for 2025 and will seek a “more
proactive” fiscal policy.
These were key changes in the language that triggered a rally in Chinese
stocks and commodity linked markets. Unfortunately, as it’s been the case for
quite some time, the moves were reversed, and we got back to square one pretty
quickly.
Nevertheless, this was a strong shift, and the market might just be waiting
for the Chinese to walk the talk this time around. On Friday, we have the PBoC
LPR decision and big rate cuts might trigger another rally in copper.
Copper
Technical Analysis – Daily Timeframe
On the daily chart, we can
see that copper couldn’t break above the key resistance
around the 4.31 level where we had also the trendline
for confluence.
The sellers stepped in with a defined risk above the resistance to position for
a drop into the major trendline around the 3.90 level. The buyers will now look
for buying opportunities on the lower timeframes but a break above the key
resistance should open up for a rally into the 4.70 level next.
Copper Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can
see that we had also an upward trendline defining the bullish momentum that
once got broken, opened the way for new lows as the sellers piled in more
aggressively and the buyers folded.
We are now bouncing from another
upward trendline and if we get a pullback into it again, we can expect the
buyers to try once again for a rally into the 4.31 resistance. The sellers, on the
other hand, will want to see the price breaking below the major upward
trendline to increase the bearish bets into new lows.
Copper Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, we can
see that we have a downward trendline defining the current bearish momentum on
this timeframe. The sellers will likely lean on it to position for a break
below the major trendline, while the buyers will look for a break higher to
increase the bullish bets into the key resistance. The red lines define the average daily range for today.
Upcoming
Catalysts
Today, we have the FOMC Policy Decision. Tomorrow, we get the latest US
Jobless Claims figures. On Friday, we conclude the week with the PBoC LPR
decision and the US PCE data.
This article was written by Giuseppe Dellamotta at www.forexlive.com. Source