COPPER – daily cloud top to ideally contain correction
Copper price moved lower on Monday, pulling back from nearly one-month high at $3.1750, posted on uninterrupted six-day rally.
Dip was so far contained by strong support at $3.1198 (Fibo 38.2% of $3.0305/$3.1750 upleg), which guards another significant support at $3.1087, provided by top of ascending daily cloud.
Deeper correction cannot be ruled out as daily RSI is heading lower while slow stochastic has turned south and is about to emerge from overbought territory.
Overall structure is bullish and positive sentiment maintained by strong demand for the metal from China, its biggest consumer, despite signs of resilience in country’s industrial sector.
Extended corrective action should be ideally contained by daily cloud top ($3.1087) with deeper dips not to exceed daily Tenkan-sen ($3.1027) to keep bulls intact.
Res: 3.1395; 3.1477; 3.1541; 3.1750
Sup: 3.1198; 3.1087; 3.1027; 3.0857