Copper futures staged a partial recovery on Monday after dipping to an intraday low of $6.27 per pound. By late morning, Comex contracts had climbed back to $6.37, as buyers attempted to push the red metal back into its long-standing bullish channel. The session's volatility reflects a market caught between supportive demand fundamentals and headwinds from a strengthening US dollar.
Bullish Drivers vs. Dollar Strength
Progress in US-Iran peace talks and the ongoing AI-driven equity rally have provided underlying support for copper prices, offsetting selling pressure from a firmer greenback. The US Dollar Index recently touched its highest level since early May, hovering near 100.98 after the Federal Reserve's hawkish stance last week. The dollar has held above the key 100.65 resistance zone for three consecutive sessions, capping copper's upside.
Investors are now turning their attention to the upcoming US personal consumption expenditures (PCE) data, the Fed's preferred inflation gauge. With the central bank offering little forward guidance in its latest statement, despite some officials projecting rate hikes before year-end, every incoming data point will be critical. The core PCE reading is expected to provide fresh cues on the Fed's policy trajectory, which will directly impact the dollar and, by extension, copper prices.
Technical Levels in Focus
On the daily chart, copper is trading near its 25-day exponential moving average (EMA) but remains above the 50-day EMA at $6.25. The relative strength index (RSI) sits at 50, indicating neutral momentum as opposing forces—strong dollar versus steady long-term demand—keep the metal range-bound.
The $6.25–$6.45 range is the key zone to monitor. Support at the 50-day EMA ($6.25) is critical; a break below that level would invalidate the current bullish thesis. On the upside, resistance near $6.45 aligns with the lower boundary of the months-long bullish channel. A breakout above this level could open the door to $6.55, the next target for bulls aiming to reestablish the uptrend.
Broader Market Context
The copper market remains sensitive to macroeconomic signals, with tariff uncertainty and geopolitical risks also in play. Recent developments, such as the fragile ceasefire and ongoing trade negotiations, have added to the metal's volatility. For a deeper dive into how these factors have shaped recent price action, see our analysis on copper dips below $14,000 and copper posts third weekly gain.
As the week unfolds, traders will closely watch the PCE release and any shifts in the dollar's trajectory. The interplay between inflation data, Fed expectations, and copper's technical setup will likely dictate the metal's direction in the near term.
This article is for informational purposes only and does not constitute financial advice.
