Copper Slides Below $4.70 as Technical Indicators Signal Bearish Momentum

Trading data from capital.com shows copper futures dropped to $4.7057 per pound on Friday morning, declining 0.28% as technical indicators point toward further weakness ahead.

The industrial metal broke below its 200-day moving average at $4.70, triggering fresh selling pressure from algorithmic trading systems. Price action over the past 24 hours reveals copper testing critical support levels while momentum indicators flash warning signals.

Technical analysis of the 4-hour chart shows copper trading within Bollinger Bands between $4.63 and $4.74. The metal currently sits near the lower band, suggesting oversold conditions may provide temporary support.

However, the 50-day moving average at $4.69 now acts as immediate resistance after prices failed to reclaim this level during overnight trading.

The Relative Strength Index dropped below 40, indicating bearish momentum without reaching oversold territory. MACD signals remain negative as the histogram shows increasing downward pressure.

Volume data confirms the selling, with higher participation during decline phases compared to recent recovery attempts. Market fundamentals support the technical weakness.

Chinese copper imports reached 3 million tonnes in April, yet domestic demand growth slowed to 0.8% projections for 2026. This disconnect between supply accumulation and consumption creates inventory pressure.

COMEX stockpiles hit eight-year highs at 168,563 tons while LME inventories dropped to 179,375 tons. The geographic mismatch reflects trade flow disruptions rather than genuine supply tightness. Tariff premiums collapsed from $1,600 per ton three weeks ago to $600 currently.

Shanghai Futures Exchange shows steep backwardation with prompt contracts trading $150 per ton above three-month futures. This structure typically signals physical market stress, yet fails to support prices amid broader macro headwinds.

Goldman Sachs maintains copper forecasts between $8,000-$10,160 per ton for 2025, citing supply constraints and electrification demand. Mine output growth remains limited at 3% annually while smelter capacity expands faster than concentrate availability.

The dollar’s strength compounds copper’s challenges as commodity prices face headwinds from monetary policy divergence. Federal Reserve officials signal continued hawkish stance while other central banks pause tightening cycles.

Energy transition demand provides long-term support, yet near-term technicals suggest further downside testing. Key support lies at $4.63, matching the lower Bollinger Band and previous consolidation levels. Break below this threshold opens $4.45 as the next target.

Traders monitor Chinese economic data for demand signals while tracking inventory flows between exchanges. The metal’s ability to reclaim $4.70 will determine whether current weakness represents healthy consolidation or deeper correction ahead.

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