Copper rallied in the past weeks as the Chinese data showed some positive signs but sold off this week as recessionary fears came back strongly with more disappointing US labour market data. The bigger picture remains bearish or at most neutral for Copper as global growth is likely heading downwards with the central banks’ restrictive monetary policies in place.
Copper Technical Analysis – Daily Timeframe
On the daily chart, we can see that Copper managed to reach the swing high at 3.90 but sold off soon after into the upward trendline. This is where the buyers are stepping in as they have also the 61.8% Fibonacci retracement level for confluence. A break below the trendline would switch the bias from bullish to bearish and likely lead to a drop into the 3.55 support.
Copper Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a downward trendline now and a support turned resistance around the 3.78 level. This is where the sellers should step in with a defined risk above the trendline to position for a break below the upward trendline. The buyers, on the other hand, will want to see the price breaking higher to invalidate the bearish setup and pile in for a rally back into the 3.90 resistance.
Copper Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the key levels marked on the chart. We can also notice that we have the 50% Fibonacci retracement level at the resistance for confluence. What happens around this resistance will likely decide where Copper will go in the next few weeks.
Upcoming Events
Today we get the latest US Jobless Claims figures where the market will want to see how fast the US labour market is weakening. Tomorrow, we conclude the week with the US NFP report which is going to be a big market moving event. Weak data is likely to weigh on Copper as recessionary fears could rise, while strong figures might continue to support the metal.
