Cautious trading didn’t stop copper traders from breaking a technical resistance!
Is the bullish breakout legit?
Copper Futures (HG1!) 1-hour Chart by TradingView
In case you missed it, copper futures (HG1!) broke above the $4.12 zone that had kept the bulls at bay for most of early February.
The base metal is now trading closer to $4.17, which lines up with a mid-channel support on the 1-hour time frame.
Are we looking at a sustained upside breakout?
The odds favor more buying as traders price in China’s reopening and the prospect of the Chinese government announcing even more stimulus measures at the National People’s Congress in March.
On the supply side, production and export disruptions among the major South and Central American copper producers could limit inventory buildup.
Extended buying could take copper to the $4.19 previous high or a trip to the $4.20 inflection point.
But if traders focus on risk aversion and global growth concerns, then copper could dip back to its $4.12 previous lows.
What do you think?
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