Chicago Copper futures price is down 3.67% at $4.0525 per pound on mid-Thursday trades.
Copper opened this week on a bearish note, witnessed a temporary rebound on Wednesday, and a resumption in its bearish momentum. This latest bearish drag has pushed the price to the lowest level since September 2021.
The recent selloff in copper is driven mainly by a weak global economic growth outlook. The possibility of a recession arose with the Fed’s hawkish stance amid surging inflation. Meanwhile, the COVID-induced lockdowns in China have been extended with severe, tightening restrictions. This, paired with the war in Ukraine having no visible end in sight, has led market participants to fear the demand for red metal.
Copper prices will be influenced by the ongoing COVID restrictions in China, inflation data, Fed’s interest rate policy, the war in Ukraine, and any other significant factors impacting global economic growth. Copper is known as “Dr. Copper,” as it performs better during economic growth and vice-versa. As a result, copper prices will be primarily determined by the outlook on global economic growth.
On the technical side, the RSI of Chicago copper futures stood at 26.69 and is currently trading below all SMAs: MA (20), MA (50), and MA (100). So, SELL position can be taken with the following target and stop-loss: