Commodities

Technical Analysis – Copper futures struggles near 23.6% Fibonacci mark; neutral in short term

Posted on March 15, 2018 at 1:30 pm GMT

Melina Deltas, XM Investment Research Desk

Copper futures are challenging the 23.6% Fibonacci retracement level of the upleg at 3.1163 from the low on May 2017 to the high in December 2017. Prices remain under pressure as the 20 and 40 simple moving averages on the daily timeframe are acting as significant resistance levels near 3.1700.

Technically, momentum indicators are pointing to a negative bias. The RSI indicator is moving slightly below the 50 level and is pointing south while the %K line of the stochastic oscillator is attempting a bearish crossover with the %D line. Also, 20-day and 40-day SMAs are following the downward momentum, suggesting steeper declines.

If prices continue to head lower and drop below the 23.6% Fibonacci mark, support could come at 3.0400. A stronger barrier, could be found at the 38.2% Fibonacci slightly below the 3.0000 psychological level.

However, should an upside reversal take form, immediate resistance could likely come at 3.2855 and a break above this area could extend gains towards the next barrier at 3.3175 taken from the high in December.

commodities copper

Legal disclaimer: The material does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instruments. XM accepts no responsibility for any use that may be made of these comments and for any consequences resulting in it. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. The research and analysis does not involve any specific investment objectives, financial situation and needs of any specific person who may receive it.

It has not been prepared in accordance with legal requirements designed to promote the independence of research, and as such it is considered to be marketing communication. Although we are not specifically constrained from dealing ahead of the publication of our research, we do not seek to take advantage of it before we provide it to our clients. We aim to establish, maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. We operate a policy of independence, which requires our employees to act in our clients’ best interests and to disregard any conflicts of interest in providing our services.

CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losing all of your invested capital, so please make sure that you fully understand the risks involved.