Copper (XCU) rebounded on Monday to reach the $6.44 area as supply in China remains tight. Copper stocks in Shanghai Futures Exchange warehouses dropped nearly 24.1% last week to 33,848 tonnes, which is the lowest level since January 2024. Smelter maintenance limited local supplies of refined copper so buyers turned to imports. Platts put China’s import premium at record $220 a tonne on Friday. The high cost has already led some Chinese processors to cut production.
The strong jobs data on Friday kept the US dollar strong and put pressure on copper prices. But the US dollar eased on Monday and supported a strong rebound in copper prices from support.
The market is now waiting for US inflation data which may set the tone for the next move. If inflation remains hot, it may support the US dollar index and keep the pressure on copper prices. But the soft readings may pull the US dollar index lower and support the copper market.
Copper Price Forecast — $6.64 Resistance and $6 Support
The daily chart for copper shows that the price broke below the 50-day SMA at $6.64 and continued to drop towards the 200-day SMA near $6.30. The price reached low of $6.26 on 6 November and created a rebound. But the rebound still looks weak. The price must recover above the 50-day SMA at $6.64 to open the way for further upside. But a break below $6.24 will push prices further down towards the $6 area.
The chart below also shows that the price has reached the area near support at $6.20. This support zone remains between $6 and $6.20 as highlighted in blue. The RSI also remains below the midline which suggests negative price action in the short term. But the RSI has been consolidating between 30 and 70 in 2026.
The quarterly chart below also shows the importance of the current resistance in copper. The price has reached extremely overbought levels in the long term and requires some consolidation before the next rally.
The price is now pulling back from resistance at the top of the ascending channel and $6 remains strong support in the copper market. The ascending channel that stretches from the lows of 2002 presents this support.
The monthly chart below shows that the major support remains at $6. This support is seen by the midline of the ascending channel that stretches from the lows of March 2020. A break below $6 will likely open the way for further drop towards $5.20. This support level is defined by the ascending trend line that stretches from the highs of May 2021.
The trend in copper still remains bullish as the price remains above $5. This correction in the copper market may attract new buyers due to heavy construction in AI sector.
Copper Price Forecast
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See all Copper forecastsWhy a Strong US Dollar Weighs on Copper Prices
The chart below shows that copper prices have tended to move in the opposite direction to the US dollar index. When the US dollar index reached a high in 2009, copper prices reached low and then rallied towards $4.50. Similarly, when the US dollar index reached a high in 2022, copper prices reached a low near $3.30 and then rallied strongly towards record highs.
The US dollar index has been trading in a downtrend since 2022 while copper prices have reached record highs. The expectations that the Federal Reserve will raise interest rates support the US dollar and keep industrial and precious metals under pressure.
The copper price is pulling back from $6.95 toward the support areas as the US dollar remains strong. Despite this correction, the overall trend for copper remains bullish, with the long term support of $5.20. Any correction towards $5.20 may attract new buyers in copper.
What to Watch Next
The tight supply in China supported a rebound in copper prices, but the price still needs to break the $6.64 level to extend the rally. The soft inflation readings may weaken the US dollar and support a rally in copper to break the resistance. But the hot reading may lift the US dollar and push the copper price back toward $6.24. A break below $6.24 may push the price to $6. A break below $6 may open the way for a drop to the long-term support of $5.20.
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