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HG1! One word - CLEAN!COMEX:HG1! One word - CLEAN! What a beautiful chart for copper! Technically it's ever so clean, when it comes to set ups like this - Be careful of fake breaks. Pattern - Triangle/Pennant Highs: 4.2100 Lows: 3.8255 A break of highs I expect: 4.3550 & 4.5570. However, a break of the lows I expect: 3.6740 & 3.5040 and perhaps lower! Currently, as long as we within this channel and within these ranges... until break either side! Have a great week ahead & it's a long weekend for some of us! 🔆 Trade Journal 🔆
COMEX:HG1!
by Trade_Journal
Copper analysis and ideas: Will bears come back?Copper prices may remain under pressure in the coming months due to investors' apprehension about China's growth prospects in the wake of the 20th National Congress of the Chinese Communist Party, which disappointed the market. Since September, copper prices have fluctuated within a relatively narrow range (3.2-3.6) after the earlier sharp declines occurred this year. The long-term case for copper remains strong, as it is a key metal for the energy transition and global inventories are currently very low. However, one of the main challenges it faces in the near future is its dependence on China’s economic growth. The brown metal will remain under pressure unless China announces new growth-friendly economic policies to counteract the predicted slowdown in the country’s economy. However, the latest China Party Congress appears to prefer fostering sustainable growth and giving more importance to inequality, national security, and ideological matters. Copper bull markets have historically coincided with periods of extraordinary global growth, driven primarily by China. We have now reached a crossroads in that regard, and if China is unable to maintain high and consistent economic growth, copper will have to wait for a new global wave of coordinated investments toward the development of renewables and green energy. However, given the issues with inflation and rising interest rates that we are currently facing, it may still be years before the transition fully takes hold on a global scale. This could take the price of copper subdued for longer. When we look at the daily chart, we can see that some bearish pressure was forming near the 78.6% Fibonacci retracement level of the 2022 range. Also the 50-day moving average has been a quite strong dynamic resistance later. The technical picture remains overall on the bearish foot, and copper needs to clear the 2022 trendline at around $3.75 and then cross the psychological $4.00 mark before materially inverting the downtrend.
CAPITALCOM:COPPER
by Capital.com
Copper analysis: Has the bear market rally ended already?After a 37% decline from its peak of $5.03 per pound in early-March 2022, copper has risen 14% since July's lows. However, the metal has recently been unable to overcome key resistance levels represented by the 50-day moving average and the descending channel trendline, as fresh worries about global growth slowdown and monetary policy tightening reemerged this week. Key macro events of the week: China, the world's largest consumer of copper, unexpectedly lowered lending rates in an effort to boost demand after reporting weaker-than-anticipated July numbers for industrial production (3.8% vs 4.6% expected), fixed asset investments (5.7% vs 6.2%), and retail sales (2.7% vs 5%). In the United States, the New York Empire State Manufacturing Index plunged to -31.3 in August of 2022, from 11.2 in July. This is the lowest reading since May of 2020, and it indicates that business activity is weakening as a result of a collapse in new orders and shipments. Germany's ZEW economic sentiment index has fallen to its lowest level since October 2008, and the UK inflation rate has risen to double digits, the highest in 40 years, adding fuel to the fire and reigniting fears of a global recession. Ultimately, the Minutes of the FOMC's July meeting revealed that there is still a long way to go before declaring the war on inflation won, with members indicating that adopting a more restrictive policy stance was critical to avoiding a worsening of inflation expectations. This implies that the Fed's tightening is far from over. Copper technical analysis A bear market rally that is nearing exhaustion can be seen on the copper daily chart. The price action this week has been unable to break above both the bearish channel and the 50-dma, the RSI has tilted to the downside, and the MACD is getting close to a bearish crossover. A similar pattern occurred earlier this year, in the first week of June. After a 14% rebound from May's lows, copper briefly surpassed the 50-day moving average before beginning a severe, steep decline that lasted until mid-July. The RSI and MACD indicators both showed similar patterns to what we are seeing now. Bottom line, a copper's short-term pullback to the bearish channel's midline in the $3.2-3.3 area seems more likely, given the current technical setup. Breaking decisively the 50-dma and bearish channel resistances would invalidate the thesis and raise the odds of a $4.00 per pound test. Idea written by Piero Cingari, forex and commodity analyst at Capital.com
CAPITALCOM:COPPER
by Capital.com