Copper prices plunged to a seven week low yesterday. It was the biggest intraday fall since 23 February 2023. The strong dollar and as jitters about the global economic outlook resulted in drastic fall in base metals prices.
The dollar rose on deepening worries about corporate earnings and the global economy. A stronger dollar pressures oil demand by making the commodity more expensive for buyers holding other currencies.
Copper prices fell for a fifth consecutive day yesterday, as Chinese demand remained weak and inventories in the London Metal Exchange (LME) warehouse system rose.
Benchmark LME copper HG1! was down 2.1% at $8,551 a tonne in official ring trading. The metal used in electrical wiring has fallen from a seven-month high of $9,550.50 in January.
Copper futures in the US fell toward the $3.8445 per pound, down 2.77% mark in late April, the lowest in one month, as projections of weak demand outweighed looming supply concerns.
Today, US Core durable goods orders and some other numbers are scheduled to be released. Which expects to bring clutter for the commodity market.
Technical Outlook
Copper prices plunged 2.23%. It was the biggest intraday fall since 23 February 2023. Prices dropped from the day’s high 759.65 and tested day’s low 739.00.
As per the outlook given on 20 April 2023, Copper prices plunged and both predicted levels of 755-748.
Intraday price action resulted in formation of a long bearish candlestick which is indicating a bearishness in the near future. However, after recent fall prices may consolidate before the next dip.
The short term trend is yet to look bearish following the strong breakdown of rising channel line support at 764.00. Further, prices trading below its 100 and 50 SMA and RSI 14 and 9 SMA also turned negative. Both indicators also support on downside momentum.
Today, immediate support is seen at 734.00 and a break below only, prices may extend fall towards next support 728-722. Else, expect to consolidate around 735.00-750.00 levels.
Alternatively, on the upside immediate resistance 755 above it copper prices may recover towards 765-768 in near future.