Copper Price

Copper Price Outlook: XCU/USD Still On Track to Attain 2011 Highs Despite Correction

A rising US Dollar is pushing back against risky commodity assets, and the 3.07% slump in copper price this Thursday appears to be a reflection of this scenario. 

Copper prices have ridden high on the recovery of demand from China, as coronavirus vaccinations and other control measures allow the reopening of China’s industrial sector. Faltering supply has also led to inventory shortages in the LME warehouses and other storage areas, allowing prices to hit 10-year highs. 

However, the market appears overextended at this point and begging for correction. The USD’s demand as a result of rising bond yields appears to have engineered the much-awaited correction on the pair. 

Technical Outlook for Copper 

The slump in copper price on Thursday follows progressively declining tops on the daily chart, causing the price candle to also break below the ascending trendline which had maintained support 3rd February to 3rd March. However, this drop appears to have found support at the 4.0060 price level, having also violated that level and touched off the 3.9535 support as well. The latter remains the initial downside target if 4.0060 fails to hold, with additional targets seen at 3.8340 and 3.7945 if the slump exceeds the projected measured move that ought to terminate at 3.9535.

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On the flip side, a resumption of the uptrend from the present levels, using the intraday bounce as momentum, could attempt a retest of 4.2015 (22 February and 3 March highs), with 4.2755 serving as the only barrier resisting the formation of a higher high that could lead to the attainment of 2011 highs at 4.3995 and 4.5260. 

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Copper Price; Daily Chart

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