Copper price: Is a Bullish Breakout at the Horizon?
- Copper price has been range-bound between 393.53 and 410.
- Fed’s Chair has indicated that the US economy is set to record further growth.
- COVID-19 cases in the US have been on the rise over the past two weeks.
Copper price is range-bound as the recovering US economy continues to offer support. However, rising COVID-19 cases and wait-and-see approach for Biden’s infrastructure plan are curbing its gains.
Copper price remains range-bound amid influence from bullish and bearish market forces. On the one hand, the steady recovery of the US economy has offered support to the red metal. As indicated by Fed’s Chair, Jerome Powell during his Sunday interview with 60 Minutes, “the outlook has brightened substantially.” The governor further indicated that the US economy is set to grow even further.
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While the US is on a steady path to recovery, it is not out of the woods yet. Notably, COVID-19 cases have been on the rise over the past two weeks. Besides, the market is reacting sparingly to President Biden’s infrastructure plan. While it has the capacity to boost copper price, investors looking to trade precious metals are waiting to see if it will get the needed approval from policymakers.
Copper Price Technical Outlook
Copper price is paring back some of its gains after falling earlier in Monday’s session. The red metal had dropped by about 1.5% as the market reacted to the high PPI digits from the US and China. However, today’s decline in the value of the US dollar has offered it some support.
Copper price was at 400.97 at the time of writing, up from its intra-day low of 398.28. On a 3-hour chart, it is trading below the 50 and 200-day exponential moving averages. In my view, the price will remain within the rectangular pattern of between 393.52 and 410 in the near term.
410 is an important resistance level that the bulls have to push past for an uptrend to be evident. Past that point, the next resistance levels that the metal will be dealing with are 415.71 and 420. On the lower side, the support levels to watch out for at 393.52 and 390. If the bears manage to push copper price past 390, they will be testing the one-month low at about 384.