Copper price analysis: Levels to watch in the data-dependent week

Copper price edged lower earlier on Monday before recouping some of those losses. At the time of writing, Comex futures were trading at $6.37 a pound after hitting an intraday low of $6.27. At its current level, the bulls are striving for a rebound back within the months-long bullish channel.

On the one hand, the steady long-term demand outlook continues to offer support to the red metal. However, a stronger US dollar curbing its upside. In the ensuing sessions, the market will likely be volatile ahead of the US inflation data.

Bulls strive for reentry within crucial bullish channel 

Copper price is in recovery mode after recording a weekly loss in the just concluded week. Progress in the US-Iran peace talks, and the AI stock rally remain major bullish drivers in the copper market. The support has offset the selling pressure from a stronger US dollar. 

In the new week, the US dollar may loose momentum as investors seek further cues from major economic events. In the past week, the greenback rallied to its highest level since early May as the market digested Fed’s hawkish tone. 

At the time of writing, it was trading close to the one-and-a-half month high at $100.98. This marks the third consecutive session that the US dollar has held steady above the 13-month long resistance zone of $100.65. 

Investors are now eyeing the upcoming economic data with the US personal consumption expenditures (PCE) figures topping the list. The Fed’s preferred gauge of inflation comes after last week’s interest rate decision by the US central bank. 

Amid the persistent inflation concerns, the Fed appears more adaptable to the fragile economic environment. As such, the ensuing sessions will be highly data-dependent as the core PCE offers further cues on the Fed’s positioning. 

Based on the latest FOMC statement, there is little forward guidance. This is despite some Fed officials projecting rate hikes before the end of the year. As such, every incoming data will be crucial and is set to impact the US dollar and copper price by extension.  

Comex copper price technical analysis

Copper price chart | Source: TradingView

Comex copper futures, the global benchmark for copper trading, edged lower earlier on Monday before recovering some of those losses. In the previous week, it recorded a weekly loss. The decline has pulled it below the crucial bullish channel that has shaped copper price movements for close to a year now. 

As seen on its daily chart, the red metal hovered around the short-term 25-day EMA at the time of writing. However, it continues to trade above the medium-term 50-day EMA. Its RSI of 50 points to range-bound trading amid the opposing forces of a stronger US dollar and a steady long-term demand outlook. 

In the short term, copper price is set to continue finding support along the 50-day EMA at $6.25. Indeed, a decline past that level would invalidate this thesis.

Subsequently, the range between $6.25 and $6.45 is worth watching. At the range’s upper border, copper price will likely face resistance amid a stronger US dollar and the bulls’ efforts to return the asset back within the crucial bullish channel. At that level, a breakout will place the next target at $6.55.