COPPER – formation of weekly bearish engulfing threatens for deeper correction
Copper remains in red on Friday and is on track for the first negative weekly close after three weeks of strong rally.
Bearish engulfing is forming on weekly chart and could generate stronger bearish signal for deeper correction of $2.9425/$3.3200 three-week rally.
Bears eventually broke below initial support provided by 10 SMA and now pressuring next support at $3.2309 (Fibo 23.6% of $2.9425/$3.3200 ascend).
Sustained break here would open way for deeper correction and expose pivotal supports at $3.1758 (Fibo 38.2% of $2.9425/$3.3200 rally) and $3.1682 (rising 20SMA).
South-heading daily RSI which reversed from overbought territory is showing a plenty of room at the downside for further extension of corrective leg from $3.3200 peak.
Broken 10SMA now acts as initial resistance at $3.2643 which should ideally keep the upside limited.
Res: 3.2643; 3.2970; 3.3085; 3.3200
Sup: 3.2309; 3.2000; 3.1758; 3.1682