Copper price is hovering below the resistance level of $4.3750 after entering the overbought zone. While it will likely ease in the immediate term, its industrial demand is expected to boost it further. In the ensuing sessions, the focus will be on industrial output data from China and other economies. Besides, based on the inverse correlation between the US dollar and most commodities, US consumer confidence and NFP jobs data are bound to impact the red metal.
Copper price technical outlook
Copper price has eased below the resistance level at 4.3750 after last week’s gains. On Friday, a decline in the value of the US dollar boosted the red metal from an intraday low of 4.2210 to 4.3685 earlier on Monday.
At the time of writing, it was up by 0.86% at 4.3555. Since plunging to a four-and-a-half month low about one-and-a-half weeks ago, it has surged by about 10%.
On a two-hour chart, the industrial metal is trading above the 25 and 50-day exponential moving averages with an RSI of 71. Based on both the fundamentals and technical, I am bullish on the metal. However, having entered the overbought territory, it will likely ease before resuming its rally.
In the near term, I expect copper price to continue finding resistance at 4.3750. It will likely hover around that resistance zone before rising further to 4.4300. Past that hurdle, the path will be clear for the bulls to push the price further to 4.5000. On the flip side, the pull back may have it along the 25-day EMA at 4.2745 before bouncing back to the 4.3750 resistance zone.