COPPER – strong bearish acceleration below thick daily cloud generates negative signal
Copper was sharply lower on Wednesday and hit the lowest since 24 Jan after bearish acceleration broke below the floor of two-week congestion.
Fresh signal for near-term direction is generating, with immediate focus turning lower after a series of Dojis and long-legged daily candles signaled strong indecision and directionless mode during past two weeks.
Renewed concerns about metal’s supply and demand outlook, pushed copper price lower as fundamentals do not justify higher prices.
Today’s acceleration lower marks over 3% loss so far, with fresh bears probing below strong support at $3.1312 (daily cloud base) and pressuring another significant supports at $3.1220 (100SMA) and $3.1065 (23 Jan low and strong downside rejection).
Surge through thickening daily cloud which kept recent price action limited and close below cloud will be strong bearish signal, as bears are on track to fully retrace $3.1065/$3.2565 recovery rally and break below $3.1065 pivot would open next target at $3.0867 (Fibo 61.8% of $2.9425$3.3200 ascend).
Broken daily cloud base now reverted to initial and strong resistance, with extended upticks expected to hold below broken 55SMA ($3.1627).
South-heading daily indicators which hold in the negative territory and daily MA’s now in full bearish setup are reinforcing negative near-term outlook.
Res: 3.1312; 3.1510; 3.1627; 3.1906
Sup: 3.1220; 3.1065; 3.0867; 3.0620