COPPER may extend correction as descending indicators show further room at the downside
Copper future contract extends pullback from new recovery high at $3.3200 on Wednesday, holding negative near-term tone and signaling the beginning of year 2018 in red.
Correction after strong rally in past three weeks when metal’s price rose over 11% was signaled by reversal of daily indicators from overbought territory, as traders booked their profits on strong advance.
Pullback tests initial support at $3.2478 (rising 10SMA), with scope for further easing as daily RSI and slow stochastic head south and show a plenty of room downside.
Correction may extend towards $3.2287 (rising daily Tenkan-sen), with deeper dips to be contained above $3.1758 (Fibo 38.2% of $2.9425/$3.3200 rally), to keep bulls intact for fresh attempts higher.
Conversely, loss of $3.1758 Fibo support would signal stronger correction.
Res: 3.2790; 3.2850; 3.3085; 3.3200
Sup: 3.2478; 3.2000; 3.1758; 3.1389