章节 46 COPPER: At the End of the Macro Bearishness, Copper Prices May Be Able to Stand Firm（6.29）
Fundamentals
During the Asian session on Thursday (June 29th), copper prices are fluctuate to the upside today and are currently trading around 8250. In the past week, copper prices have fallen by more than 500 bps from 8711 to around 8205, under the pressure of macro tightening outside the Fed and Europe, and the decline in PMIs in various countries. After a continuous downward trend, copper prices began to show signs of stabilization, rebounding slightly to oscillate around 8250. However, copper prices are still in a downward trend, but the power of bears has weakened significantly, with the space below more limited in the short term, which can still take long positions at lows rollingly.
Macro: Fed Chairman Jerome Powell stated that two more rate hikes are expected during the year. US inflation will gradually fall back to 2% by 2025, arguing that monetary policy is not restrictive enough and not long enough. Biden also stressed that reducing inflation remains a top priority for now. S&P expects global GDP growth of 2.9% this year and next, before rising to 3.3% in the coming years.
Industry: Codelco said it was still assessing the impact of weather-related shutdowns in the south-central part of the country. After the heavy rains, part of the El Teniente copper mine remained suspended. While underground operations were able to continue, production in the Sewell and Rojo areas remained at a standstill.
Overall: The risk of macro bearish speculation has been greatly released on copper prices. Copper prices rebound in the short term, mainly, on the one hand, the support of low-cost lines and inventories, on the other hand, the expectation of interest rate hikes have been basically price-in, unless there are greater bearish factors again. As for the medium term, whether we can break the shock and walk out of a clear direction depends on the interpretation of two things. The first is whether China's demand can really pick up stimulated by active policies. The second is the Fed's monetary policy trend when it can end up raising rates and enter the interest rate reduction range. Perhaps when the two things are determined, copper prices can usher in a real reversal.
Technical Analysis
Trading at the daily timeframe, the last round of copper prices from around 7850 all the way to 8710. After a sharp correction in 5 days, the current copper price has retraced more than 50%, back to around 8250. That is, the center of the shock around 8280, the line may still have some support. After the excessive downward trend of copper prices, technically speaking, there is also a chance of an over-falling rebound in 5 consecutive falls, coupled with the speed and magnitude of the pullback, the risk of chasing short is greater, and it is no longer suitable to chase short. After copper prices stand firm, it may be a good opportunity to take long positions in a rebound at lows.
It is recommended that investors do not participate in short orders and wait for copper prices to stabilize before taking long positions. If the copper price stands firm at the 8250 line, you can wait for the opportunity to open long orders. The stop loss is set at 8000, the first target of take profit is 8600, and the second target is 8800.
Trading Recommendations
Trading Direction: Long
Entry Price: 8230
Target Price: 8600
Stop Loss: 8000
Support: 8200/8000
Resistance: 8630/8711
