Technical Analysis – Copper futures develop in symmetrical triangle
December 14, 2018 12:25 pm
Copper futures with delivery on March 2019 have been trading in a symmetrical triangle pattern over the last four months. Currently, the price is trying to slip below the 23.6% Fibonacci retracement level of the sharp downward movement from 3.3290 to 2.5485, around 2.7329 as well as below the 20- and 40-simple moving averages (SMAs) in the daily timeframe.
While the technical indicators continue to slow down, mirroring the market’s weak behavior over the last couple of days, the RSI indicator is moving in bearish territory, flagging that a downside move could reemerge in the short term. The MACD is also holding below its red signal line, which supports the negative to neutral view as well.
In case the price continues to move lower, the next immediate support is coming from the 2.7000 strong level, which stands near the uptrend line. A penetration of this line would erase the symmetrical triangle and drive prices until the 0.6380 obstacle.
Alternatively, in case of a bounce up the price could reach the downtrend line around the 38.2% Fibonacci level of 2.8466. Marginally above this area, another potential barrier for upward movements could come around 2.8630.
Summarizing, copper prices maintain neutral bias in medium-term picture and a downward penetration of the symmetrical triangle is expected as it is a continuation pattern.
Copper futures with delivery on March 2019 have been trading in a symmetrical triangle pattern over the last four months. Currently, the price is trying to slip below the 23.6% Fibonacci retracement level of the sharp downward movement from 3.3290 to 2.5485, around 2.7329 as well as below the 20- and 40-simple moving averages (SMAs) in the daily timeframe.
While the technical indicators continue to slow down, mirroring the market’s weak behavior over the last couple of days, the RSI indicator is moving in bearish territory, flagging that a downside move could reemerge in the short term. The MACD is also holding below its red signal line, which supports the negative to neutral view as well.
In case the price continues to move lower, the next immediate support is coming from the 2.7000 strong level, which stands near the uptrend line. A penetration of this line would erase the symmetrical triangle and drive prices until the 0.6380 obstacle.
Alternatively, in case of a bounce up the price could reach the downtrend line around the 38.2% Fibonacci level of 2.8466. Marginally above this area, another potential barrier for upward movements could come around 2.8630.
Summarizing, copper prices maintain neutral bias in medium-term picture and a downward penetration of the symmetrical triangle is expected as it is a continuation pattern.
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