Technical Analysis of Copper (XCU/USD)
Copper has faced strong resistance over the past four years, being strictly rejected at key resistance levels three times. Recently, on May 20, 2024, Copper reached its all-time high of $5.2, but the current weekly candle is showing signs of retesting that level. Despite this short-term bullish momentum, the broader trend from May 2021 remains bearish, indicating a long-term downtrend. A simple trendline drawn from May 2021 shows that Copper’s price action has struggled to maintain upward momentum and is likely to revert back to its mean.
The short-term trendline from the May 20, 2021 high also suggests that a pullback is imminent. Given this setup, the outlook for XCU/USD is bearish, and the price may gradually decline towards the recent support level of $4.0 before experiencing a potential upward swing. Traders holding Copper for weeks might consider short positions, while those trading shorter timeframes could scalp long positions on temporary upward moves with a suitable stop-loss strategy.
Fundamental Analysis of Copper (XCU/USD)
The global Copper market is currently facing a supply and demand imbalance due to shifting trade flows. Traders are redirecting shipments from Asia to the US to capitalize on higher prices and avoid potential tariffs, resulting in a tightening Copper supply in China. Estimates suggest that 100,000 to 150,000 metric tons of refined Copper will arrive in the US in the coming weeks. This could put upward pressure on US Copper prices while simultaneously reducing available supply in China, where demand is expected to rebound due to government stimulus efforts.
Meanwhile, Copper inventories on the London Metal Exchange (LME) and Shanghai Futures Exchange (SHFE) are declining, signaling a tighter supply in the market. In the US, the situation is further complicated by tariff threats from President Donald Trump, which could restrict Copper imports. Given that the US imports nearly half of its Copper supply and relies on only two major smelters, any additional tariffs could create a domestic supply squeeze, potentially driving prices higher in the short term. However, if global economic conditions weaken or demand slows, Copper prices may follow the bearish trajectory predicted in the technical outlook.
Copper has faced strong resistance over the past four years, being strictly rejected at key resistance levels three times. Recently, on May 20, 2024, Copper reached its all-time high of $5.2, but the current weekly candle is showing signs of retesting that level. Despite this short-term bullish momentum, the broader trend from May 2021 remains bearish, indicating a long-term downtrend. A simple trendline drawn from May 2021 shows that Copper’s price action has struggled to maintain upward momentum and is likely to revert back to its mean.
The short-term trendline from the May 20, 2021 high also suggests that a pullback is imminent. Given this setup, the outlook for XCU/USD is bearish, and the price may gradually decline towards the recent support level of $4.0 before experiencing a potential upward swing. Traders holding Copper for weeks might consider short positions, while those trading shorter timeframes could scalp long positions on temporary upward moves with a suitable stop-loss strategy.
Fundamental Analysis of Copper (XCU/USD)
The global Copper market is currently facing a supply and demand imbalance due to shifting trade flows. Traders are redirecting shipments from Asia to the US to capitalize on higher prices and avoid potential tariffs, resulting in a tightening Copper supply in China. Estimates suggest that 100,000 to 150,000 metric tons of refined Copper will arrive in the US in the coming weeks. This could put upward pressure on US Copper prices while simultaneously reducing available supply in China, where demand is expected to rebound due to government stimulus efforts.
Meanwhile, Copper inventories on the London Metal Exchange (LME) and Shanghai Futures Exchange (SHFE) are declining, signaling a tighter supply in the market. In the US, the situation is further complicated by tariff threats from President Donald Trump, which could restrict Copper imports. Given that the US imports nearly half of its Copper supply and relies on only two major smelters, any additional tariffs could create a domestic supply squeeze, potentially driving prices higher in the short term. However, if global economic conditions weaken or demand slows, Copper prices may follow the bearish trajectory predicted in the technical outlook.
Trade forex, indices, stocks and metals with up to US$100.000 in company's funding.
Complete a challenge to access funding or go for instant deposit.
Trading involves substantial risk. Not financial advice
Complete a challenge to access funding or go for instant deposit.
Trading involves substantial risk. Not financial advice
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Trade forex, indices, stocks and metals with up to US$100.000 in company's funding.
Complete a challenge to access funding or go for instant deposit.
Trading involves substantial risk. Not financial advice
Complete a challenge to access funding or go for instant deposit.
Trading involves substantial risk. Not financial advice
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.