Copper price is locked in a corridor, but this trend is short-term

31 March 2023 191
Copper price is locked in a corridor, but this trend is short-term

First Quantum Minerals Ltd. is buying a majority stake in the La Granja copper project in Peru from Rio Tinto Group for $105 million. It will help the company to focus on developing new deposits in Mongolia and the U.S. and become less dependent on its larger copper asset in Panama, which has been suspended due to a tax dispute.

Copper plays an important role in the transition to sustainable energy. It is an integral element of different technologies, including wind turbines and electric vehicles. According to S&P Global, copper demand will double in the next ten years, making investments in copper-producing companies more appealing.

The event that showed an increase in First Quantum Minerals Ltd. copper production has already lowered the prices. News from China also reduced the metal’s price by 1.16%. The Chinese PMI index declined from 52.6 to 51.9 in a month.

After going beyond the flag on the D1 timeframe, the growth prospects for copper prices remain high. The previous analysis is still relevant.

The news on the red metal balanced the movement and volatility decreased, transferring to a rectangular corridor with the range of 8,835 – 9,085.

The Relative Strength Index (RSI) on the H1 timeframe is also in the range between the overbought and overbought lines, indicating the trend of price moving from support to resistance and back. In this case, the price rebounded from the support level of 8,835 and rushed to the opposite boundary of the range.

According to the wave analysis, the price is currently in the formation of the third impulse ascending wave. The price will gain the main impulse only after breaking through the top of the first wave at the level of 9,085.

Copper price is locked in a corridor, but this trend is short-term - Photo 1

The price rebound from support and the formation of the third wave uptrend provide a chance to buy copper in the bargain zone.

Signal:

Copper medium-term outlook — buying.

The target is at 9,340.

Part of the profit should be fixed near the level of 9,085.

The Stop loss is at 8,805.

Bullish trend has a medium-term nature, so it is worth to select the trading volume of no more than 1% of your balance.

This content is for informational purposes only and is not intended to be investing advice.

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