Copper surges into daily cloud, driven by weaker dollar / profit-taking
Copper surged on Tuesday, extending recovery rally from $3.0250 low for the second day, driven by weaker dollar and traders covering short position ahead of Chinese New Year holiday.
Fresh bullish acceleration took out two Fibo barriers at $3.1022 and $3.1260 (Fibo 38.2% and 50% of $3.2270/$3.0250 fall respectively), penetrated daily cloud (cloud base lies at $3.1312).
Extension into daily cloud cracked next pivot at $3.1377 (Fibo 38.2% of entire $3.3200/$3.0250 pullback and daily Tenkan-sen ($3.1405).
Today’s strong rally which so far marks the biggest daily gains since 24 Jan, has generated several bullish signals which suggest further advance, as daily techs are improving.
Bulls pressure next significant barrier at $3.1498 (Fibo 61.8% of $3.2270/$3.0250) close above which will be bullish signal for extension through daily Kijun-sen ($3.1575) towards next key barrier at $3.1985 (daily cloud top).
North-heading daily RSI and slow stochastic show plenty of space to accommodate further bullish extension.
Broken cloud base should ideally contain and keep the downside protected.
Res: 3.1498; 3.1575; 3.1793; 3.1985
Sup: 3.1405; 3.1312; 3.1270; 3.1022