Commodities

Technical Analysis – Copper futures reload for a push higher

Posted on December 19, 2019 at 4:19 pm GMT

Anthony Charalambous, XM Investment Research Desk

Copper futures are attempting to restart the climb with the latest push off the 2.7957 level, which is the 61.8% Fibonacci retracement of the down leg from 2.9915 to 2.4785. While the Kijun-sen line displays a short period of consolidation, the Tenkan-sen line is reflecting a pick up in positive momentum, something also suggested in the technical indicators.

The short-term oscillators, although having weakened, exhibit signs of an improving picture. Currently both in bullish territory, the RSI is rising from its neutral mark while the MACD looks to move back above its red trigger line. Furthermore, the upward slopes in the simple moving averages (SMAs) concur with an appreciating outlook.

If buyers manage to drive the price higher, the fresh seven-month peak of 2.8260 could be first to apply downside pressure. If successfully overrun, the 2.8445 high from May 6 could be next to challenge the ascent. If the bulls persist, the 2.8600 resistance – this being the inside swing low from April 25 – could be next to obstruct any further gains.

Otherwise, if sellers reverse the price, an initial tough support region of 2.7957 to 2.7840 would need to be conquered. The obstacles being that of the Ichimoku lines, the 61.8% Fibo, the swing low, 50-day SMA and cloud. Succeeding, the swing low of 2.7615 and lower support at 2.7500 could halt the drop to test the 50.0% Fibo of 2.7347 and 100-day SMA below at 2.7288.

In brief, the short-term bias is neutral-to-bullish and a break above 2.8260 would repower the positive picture. However, a break below 2.7615 could see a negative move start to unfold.

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