Charts Of The Day: Copper’s slow recovery

Market Analysis / 4 Min Read
Milan Cutkovic / 01 Jun 2021

Highlights:

  • Copper is slowly recovering from a recent slump, but the metal will have to overcome resistance for momentum to pick up
  • Oil caught a bid as the OPEC+ alliance expressed optimism about demand outstripping an increase in supply
  • Coffee prices continue to march higher
  • Rebound in oil prices and broad dollar weakness could put USD/NOK under increased pressure

Copper

Copper is slowly recovering from the recent slump. The breakout above the falling trendline and the 50% Fibonacci level of the May decline are promising signs, but the metal will have to overcome resistance $4.70 for momentum to pick up.

However, Copper bulls still have the upper hand with the broad uptrend clearly intact. Speculators remain bullish as forecasts of a global economic upswing keep demand stable. Should Copper overcome the $4.70 hurdle, an extension of the recovery rally towards $4.82 seems likely. To the downside, support is seen at $4.59.

Oil Markets

Oil caught a bid today as the OPEC+ alliance expressed optimism about oil demand outstripping an increase in supply. The organization is not overly concerned about a potential return of Iranian supply, should sanctions be lifted.

USOIL ran once again into strong resistance at $67.40 and failed to clear this obstacle. Nevertheless, a test of the $68 level appears to be a matter of time. The next significant resistance level would then lie at $70, followed by $74.

Coffee

Meanwhile, Coffee prices continue to march higher. The Daily RSI is signaling overbought conditions, but the uptrend has yet to show any signs of weakness. Imminent support is seen at the former resistance level at $155.27, followed by $142.53. To the topside, the next notable resistance level lies at $175.80. A drought in Brazil and disruptions in the global supply chain have been pushing Coffee prices higher, and it could take a while until prices stabilize.

USD/NOK

The rebound in Oil prices and broad Dollar weakness could put USD/NOK under increased pressure in the near-term. The Norwegian Krone is benefiting from a rise in Oil prices, and a hawkish central bank leaves more upside for the currency. The falling trendline from the March high has capped the topside in the past few days, and NOK bulls are now eyeing another test of the 8.1483-8.1740 support zone. USD/NOK might bounce back from there initially, but sellers are likely to emerge quickly on any upside retracement.

The information is not to be construed as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product, or instrument; or to participate in any trading strategy. Readers should seek their own advice. Reproduction or redistribution of this information is not permitted.

More on this topic

See More News

Open your account. Trade within minutes.

Start your trading journey with a trusted, regulated, multi-award winning broker.

Open Account Try Free Demo