Copper prices extended their gains for the 3rd straight session and are expected to target the February 2011 high at 10190.00, according to the latest outlook by Axel Rudolph, who works at Commerzbank as a Senior FICC Technical Analyst.
The current rally in copper prices amounts to a 124% gain since March 2020’s low recorded at the start of the coronavirus pandemic. The continued surge in copper prices comes as a result of further demand from China and supply concerns from Chile, where the threat of industrial action has been a recurring decimal since the 3rd quarter of 2020.
Falling inventories in LME warehouses are also a price pusher, with as much as 155,000 tonnes of inventory shortfall being reported. Chinese imports are up 11.7% in Q1 2021, when compared with Q1 2020.
Copper demand is also expected to grow in the medium term and long term, following conversions towards greener energy systems.
Technical Outlook for Copper Price
Today’s upside move falls just short of the August 2011 highs, after copper price suffered an intraday pullback which has left it with gains of just 0.51%. However, bullish momentum remains intact for the day. 4.5260 remains the price to beat for bulls. A break of this level targets the February 2011 high at 4.6465, in line with the analysis of Commerzbank.
On the flip side, if the active daily candle forms a hammer, bears need to see a bearish candle that closes below today’s low to signal a short-term correction. Such a corrective move would target 4.3995 initially, with 4.2755 and 4.2015 also in line to serve as additional downside targets. These prices, along with the 4.1100 price level (15 April low) may also serve as dip-buying areas.