Fundamental Overview
Copper has been rallying steadily since the start of the month as the market is looking forward to improving global growth in 2025. As a reminder, the Chinese Politburo announced last year that it will adopt a “moderately loose” strategy for monetary policy for 2025 and will seek a “more proactive” fiscal policy.
We have yet to see the Chinese officials to “walk the talk” but the market is still hoping for stronger easing measures this year. The US manufacturing activity has been picking up with the ISM Manufacturing PMI now almost back into expansion. The global central bank easing generally leads to a pickup in activity and it should be a tailwind for the copper market.
The focus remains on the Chinese economy and on Trump’s tariffs. A looser tariff policy will likely boost the market further as concerns around slower global growth and negative impact on the Chinese economy should fade. Conversely, harsh policies will likely weigh on the risk sentiment and copper prices.
Copper Technical Analysis – Daily Timeframe
On the daily chart, we can see that copper recently broke above both the major
trendline and the key 4.31
resistance. The buyers just kept on increasing the bullish bets on every break higher with the 4.70 level as the next target. The sellers, on the other hand, will want to see the price falling back below the 4.31 level to start targeting a drop back into the lows.
Copper Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have now a strong support zone around the 4.31 level where we can also find the 38.2%
Fibonacci retracement level for
confluence. That’s where we can expect the buyers to step in with a defined risk below the support to position for a rally into the 4.70 level next. The sellers, on the other hand, will look for a break lower to pile in for new lows.
Copper Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a minor resistance zone around the 4.40 level. If the price were to pull back into the resistance, the sellers will likely step in there to target a break below the 4.31 support, while the buyers will look for a break higher to increase the bullish bets into new highs. The red lines define the
average daily range for today.
Upcoming Catalysts
This week is pretty empty on the data front with just a couple of key releases scheduled for the latter part of the week. Today, we have the Trump’s Inauguration as the 47th US President. On Thursday, we get the latest US Jobless Claims figures, while on Friday we conclude with the Flash US PMIs.
This article was written by Giuseppe Dellamotta at
www.forexlive.com.
