Fundamental
Overview
Tonight, the PBoC
announced lots of easing measures ranging from short to long term interest
rates. This was the catalyst for the copper rally. Things are starting to look
better for the market as we’ve also got a 50 bps cut from the Fed last week.
Central bank
easing generally leads the manufacturing cycle, so we can expect global growth
to pick up. All these reasons should be bullish for the market and support
prices in the next months (barring a recession of course).
Copper
Technical Analysis – Daily Timeframe
Copper Daily
On the daily chart, we can
see that copper broke above the recent high at 4.31 and extended the rally into
the 4.45 level following the PBoC stimulus announcement.
If the price pulls
back to retest the 4.31 level, we can expect the buyers to step in with a
defined risk below the level to position for a rally into the 4.69 level next.
The sellers, on the other hand, will want to see the price breaking lower to
position for a drop into the trendline
around the 4.15 level.
Copper Technical
Analysis – 4 hour Timeframe
Copper 4 hour
On the 4 hour chart, we can
see that we have an upward trendline defining the current bullish momentum. The
buyers will likely keep on leaning on the trendline to position for new highs,
while the sellers will want to see the price breaking lower to pile in for a
drop into the major trendline.
Copper Technical
Analysis – 1 hour Timeframe
Copper 1 hour
On the 1 hour chart, we can
see the strong rally following the PBoC announcement overnight. We have a nice
support zone around the 4.40 level where we can find the confluence
of the previous resistance
now turned support and a minor trendline.
If we get a pullback into
the support, the buyers will likely step in to position for a rally into new
highs, while the sellers will look for a break to pile in for a drop into the
4.31 level. The red lines define the average daily range for today.
Upcoming
Catalysts
Today we have the US Consumer Confidence report. On Thursday, we get the
latest US Jobless Claims figures. On Friday, we conclude the week with the US
PCE.
