Stronger dollar pressure pushes Copper lower

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Copper drops 2.76% to $6.386 today

Highlights

Reduced demand from Asian technology firms and cautious trading ahead of US midterm elections have lowered copper buying interest.
A stronger dollar and weaker yuan make dollar-priced copper less affordable for Chinese buyers, further limiting demand.
Copper trades below short- and medium-term moving averages and is expected to fluctuate between $6.2653 and $6.5067 with strong downside pressure.

Demand falters as Asian tech selloff dampens copper appetite

A renewed selloff in Asian technology stocks has reduced near-term demand for copper used in data centers, according to Bloomberg. This decrease in industrial consumption has contributed to weaker appetite from buyers. Additionally, traders have grown more cautious ahead of the US midterm elections, limiting new positions in copper. A stronger dollar and a weaker yuan have also made dollar-priced copper more expensive for Chinese buyers, further dampening demand, as noted by Brecorder.

Seller dominance persists as short-term technical pressure mounts

Looking at the technical backdrop, HG remains below the MA-20 and MA-50 levels on the H4 timeframe, reflecting ongoing short- and medium-term selling pressure. The $6.5244 Ichimoku Kijun marks immediate resistance, while price holds above the longer-term MA-200. MACD and ADX both indicate clear selling momentum, whereas RSI and Stoch RSI are in neutral territory. CCI is oversold, hinting at exhaustion among sellers, but does not guarantee a reversal. Negative Bull/Bear Power and confirmation from the Awesome Oscillator further illustrate intraday dominance by sellers.

Downside risk rises as consolidation remains likely

Over the next few sessions, Copper is expected to trade within the $6.2653 to $6.5067 range, reflecting the current volatility band. The probability of an upward move is very low, with a much higher likelihood of further declines. Barring a breakout above immediate resistance, the baseline scenario envisions consolidation within this corridor. A drop through the lower end of the range could accelerate bearish momentum.

Anton Kharitonov, expert at Traders Union, sees clear technical and fundamental pressure weighing on Copper. He notes that declining demand from Asian tech and Chinese buyers, coupled with bearish momentum, limits any upside. The analyst remains cautious as long as price trades below key moving averages. "The base case remains consolidation or further decline unless $6.5244 is reclaimed."

Earlier, analysts noted that copper futures remained under sustained selling pressure amid weak technical signals and lackluster market momentum. The current analysis strengthens this view, highlighting dollar strength and sector-specific demand headwinds as additional factors, with traders advised to monitor for potential downside acceleration if support near $6.2653 is breached.

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

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