Copper pullback brings potential buying opportunityCopper has been heading lower over the course of this week thus far, with a more fearful market environment bringing dollar strength and weakness for this key metal. Dr Copper is typically seen as a key gauge of global economic strength, but it is also inversely correlated with the dollar. That means that it can also experience selling pressure on strong data if markets perceive that as being a negative in terms of the implications for monetary policy.
For the long-term perspective, demand for Copper is likely to gain traction as the Chinese recovery takes shape and EV demand drives the commodity higher yet. Nonetheless, for now we are likely to see near-term movement based on risk attitudes. The pullback in to trendline and 76.4% Fibonacci support has brought about a potential bullish reversal play. A decline through trendline and $3.7875 support would signal a potential bearish breakdown from here. Until then, the bulls look like they could come back into prominence once again here.
