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.
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