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Copper fell by about 0.4% in the European trading session by upcoming fears of lower demand and concerns of recession which pressures demand for industrial products.

• The recent PMI data showed that China’s factory activity contracted in December due to the Covid cases as well as the property sector which hurt the market context.
• A bullish factor to consider would be Chile’s output drop of about 6.7% as global copper stocks have fallen to record lows.
• Additionally, mining giants forecasted supply drops of about 50 million tonnes which might boost the price of the metal.

The technical perspective might change its bias to a slight bullish tendency in the new month and Year with positive volatility and a potential weakening dollar which might boost commodities, depending on the FOMC minutes later in the session to shed details of further inflation worries and the rate hike path. Increases in the rate with higher projections might be concluded as bearish while a potential easing with a dovish tone may support the metal.

The prior month’s low of December has been taken out and might initiate buyers for core long positions in combination with absorption. The daily interval dipped below the prior month’s balanced price range and a possible close inside of the particular range could conclude an additional buying signal with a buying tail and swing failure. The mentioned core buyers might target the upper balance extreme as a rotational scenario.

The hourly interval as a short-term perspective already worked its way back into the day’s developing value area to target the session’s highs and the prior VWAP close level.

However, forecasts point to the downside, according to algorithm calculations which depend on further economic data input and the mentioned FOMC minutes.

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