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Facts:
- The price tested the peak area around 14,000 twice and pulled back from it.
- The price fell below 13,550.
- The MACD line crossed below the signal line in May.
- Copper inventories are at their highest levels in 23 years.
Recommendation: Short position (Sell) on COPPER at market price.
- Target price (TP): 12,500
- Stop Loss (SL): 14,000
COPPER (D1)
Source: xStation5
OPINION :
From a technical perspective, the move below support at ~13,550 can be observed after multiple tests of the 14,000 level. This suggests a loss of initiative by buyers, which is supported by the MACD, which already issued a bearish signal at the end of May. The key fundamental factor that still needs to be priced in is the lack of an announced tariff on refined copper by the Commerce Department, with the deadline falling on June 30, 2026. A potential lack of a decision or a postponement to 2027 would remove the existing rationale for elevated inventories in the US. Additional pressure comes from the hawkish communication of the Fed under K. Warsh, strengthening the dollar and limiting global industrial activity.
Methodology and assumptions:
- The recommendation was based on technical analysis of the chart, in particular EMA averages and Fibonacci levels, and on fundamental analysis of the copper market.
- The target level was determined based on Fibonacci levels and EMA averages.
- The protective stop loss order was set above the most recent significant swing high in the price structure, offering a favorable risk-to-reward ratio.
