Technical Analysis – Copper futures lacks clear direction in medium term
January 24, 2019 2:26 pm
Copper futures with delivery in March 2019 have been trading in a consolidation area over the last five months with an upper boundary the 2.8530 resistance level and lower boundary the 2.5480 support. Currently, the price is trying to sink below the 20-simple moving average (SMA) in the daily timeframe, sending the market towards the lower boundary of the range.
While the technical indicators continue to slow down, mirroring the market’s weak behavior over the last three 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 zero line, which supports the neutral to negative view as well.
In case the price continues to move lower, the next immediate support is coming from the 2.5480 – 2.5395 strong area. A penetration of this line would erase the sideways channel and drive prices until the 2.5320 obstacle.
Alternatively, in case of a bounce up the price could reach the 23.6% Fibonacci retracement level of the downleg from 3.3290 to 2.5395, around the 2.7220 resistance level. However, the price needs first to successfully surpass the 40-day SMA. Above this area, another potential barrier for upward movements could come around 2.8010.
Summarizing, copper prices maintain neutral bias in medium-term picture, while in the longer timeframe, the market remains in negative structure.
Copper futures with delivery in March 2019 have been trading in a consolidation area over the last five months with an upper boundary the 2.8530 resistance level and lower boundary the 2.5480 support. Currently, the price is trying to sink below the 20-simple moving average (SMA) in the daily timeframe, sending the market towards the lower boundary of the range.
While the technical indicators continue to slow down, mirroring the market’s weak behavior over the last three 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 zero line, which supports the neutral to negative view as well.
In case the price continues to move lower, the next immediate support is coming from the 2.5480 – 2.5395 strong area. A penetration of this line would erase the sideways channel and drive prices until the 2.5320 obstacle.
Alternatively, in case of a bounce up the price could reach the 23.6% Fibonacci retracement level of the downleg from 3.3290 to 2.5395, around the 2.7220 resistance level. However, the price needs first to successfully surpass the 40-day SMA. Above this area, another potential barrier for upward movements could come around 2.8010.
Summarizing, copper prices maintain neutral bias in medium-term picture, while in the longer timeframe, the market remains in negative structure.
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