Copper Forecast Today 08/04: Finds Support (Chart)

(MENAFN- Daily Forex)

• During the Monday session, we saw a lot of selling in multiple markets around the world, including copper.
• This does make a certain amount of sense, considering that the copper market is quite often thought of as a gauge on where global growth might be going.
• After all, the demand for copper is directly tied to a lot of electronic production, as well as simple construction.
• There's also the copper component of artificial intelligence construction, so it all ties together for a sign of where things might end up.

China and copper

It's also worth noting that China has a major influence on copper, and as the Chinese economy gets better or worse, typically the price of copper will move right along with it. This is because one of the biggest construction sites in the world right now is China, and of course they are the world's manufacturing center. The copper market is highly sensitive to economic numbers coming out of China, because China is a major importer of copper from places like Australia.

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All things being equal, this is a market that bounced rather significantly from the $4 level, which obviously is a large, round, psychologically significant figure, and an area that's been important multiple times in the past. I do believe at this point we are looking at a market that is trying to find its bottom, and I do think that we are getting fairly close to that. If we see any stability in the global trade situation and the headlines, copper could absolutely rip straight up in the air. This is a market that will be highly sensitive to the idea of whether or not trade will pick up, or slow down.

If we were to break down below the $4 level, then I think copper continues to fall, perhaps down to the $3.75 level below. Again though, we have seen a massive bounce during the day on Monday, suggesting that perhaps there is a lot of support in this neighborhood. The longer-term traders, copper might start to look interesting if we can stabilize.

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