Copper price falls amid US midterm election caution and weaker Chinese demand

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Copper drops 3.31% to $6.3498 today

Highlights

Risk-off positioning before US midterm elections and a weaker yuan have contributed to decreased copper demand and limited Chinese imports.
Copper demand and market activity have recently declined as investors cut exposure to cyclical assets.
Copper trades down 3.31% at $6.3498 with strong bearish momentum, projected to remain within $6.2895 to $6.4101 and with a 79% probability of a further decline.

Weaker yuan and US election caution curtail copper demand

Risk-off sentiment in advance of the US midterm elections has weighed on copper markets, as investors adopt a more cautious stance and reduce exposure to cyclical assets, according to TradingView. At the same time, a weaker yuan has raised the cost of dollar-denominated commodities, limiting buying appetite among Chinese importers. Both factors have contributed to the recent decline in copper demand and market activity.

Bearish control as technicals flag resistance and oversold momentum

On the hourly chart, HG is trading below the SMA-20 at $6.496 and the SMA-50 at $6.5073, while it remains just above the SMA-200 at $6.3288 on the daily timeframe. The Ichimoku Kijun sits at $6.4733, presenting immediate resistance. Momentum indicators reinforce the downside: MACD and ADX signal seller control, RSI is parked at 25.97, and both Stoch RSI and CCI indicate oversold conditions. Bull/Bear Power also suggests sellers dominate intraday movements, and the Awesome Oscillator aligns with the prevailing downtrend, confirming persistent bearish momentum.

Downside favored with strong risk unless resistance breaks

For the next two to three trading days, copper is projected to remain within the volatility band of $6.2895 to $6.4101. The probability of a further decline is elevated, with a 79% chance of downside and only a 21% likelihood of a rebound in the short term. A break above the $6.4733 resistance would be needed for bulls to regain traction, while a breach of support could open the way to the lower end of the expected range.

Viktoras Karapetjanc, senior analyst at Traders Union, sees copper facing significant macro and sentiment-driven headwinds. He believes the combination of election-related risk aversion and a weaker yuan is keeping buyers on the sidelines, especially from China. The analyst notes that bearish momentum dominates and resistance at $6.4733 remains a key pivot point for any recovery. 'Unless risk sentiment improves or Chinese appetite returns, copper is likely to stay under pressure in the near term,' he says.

Earlier, analysts noted that Codelco's strategic significance to Chile supports its credit profile, but ongoing operational and governance challenges create persistent risks for copper supply. The latest technical analysis underscores continued downside momentum for copper prices, making a break of the $6.4733 resistance level essential for any potential recovery in the near term.

Source of Data: HG Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.