Português
Español
Français
русский
The price of copper started to rise after news that COVID-19 restrictions are starting to ease in China. The latest instance is that Shanghai has started to ease COVID-19 measures caused risk-on assets to rally.
After the lockdown protests in the week prior, it has been a big change of pace in China’s plans in dealing with the pandemic, the question is still how a major re-opening for China will play into global inflation developments.
The country of China is where 52% of the world’s copper goes. A harsh recession there would badly hurt demand and could balance the market, though much of that consumption is for re-export in products.
Copper is usually considered a proxy for global growth. When copper demand is strong it normally means that the Chinese economy is starting to accelerate or is experiencing solid growth.
Sentiment towards copper has been the biggest risk in the market over recent months as the market turned heavily bullish towards the red metal. Sentiment towards copper is now bullish.
According to the ActivTrader platform 67 percent of traders are bullish. With the current sentiment bias towards copper, I believe more short-term downside in the red metal seems the most likely scenario.
Copper Short-term Technical Analysis
The four-hour time frame shows that copper has regained its short-term bullish bias and is now started to move back towards its key former range high, around the $395.00 level.
It is also noteworthy that a bearish head and shoulders pattern with a $40.000 upside is close to being invalidated. Invalidation of the pattern would be very encouraging in the short-term.
See real-time quotes provided by our partner.
Copper Medium-term Technical Analysis
The larger picture for copper prices remains bearish because the red-metal is now testing back towards its 200-day moving average, which is a key benchmark of medium to long-term strength.
At the moment the price of copper is also trapped within its lower long-term range. Those with a keen eye will also see that the $400.00 level is key for further upside.
See real-time quotes provided by our partner.
