Strong bounce on supply concerns eyes key barriers at 2.8780/2.8960
Copper bounced on Tuesday, making 3% advance so far, boosted by concerns about possible supply disruption on negotiations about labor contract between workers and management of world’s biggest copper mine, Escondida in Chile.
Recovery accelerated after double strong downside rejection above 2.67 zone, signaled by momentum / slow stochastic bullish divergence and supported by strong momentum.
Rally cracked falling 20SMA (2.8293) with close above needed for fresh bullish signal for recovery extension towards lower top at 2.8780, posted on 09 July.
Overall picture remains bearish and current rally is seen as correction, which needs break above 2.8780 and 2.8960 (weeklty cloud base) to signal stronger recovery.
Reversal of slow stochastic from oversold zone on weekly chart supports scenario of stronger correction, which needs to regain 2.9172 pivot (Fibo 38.2% of 3.3140/2.6720 fall, reinforced by falling 30SMA) to signal reversal.
Res: 2.8293; 2.8780; 2.8960; 2.9172;
Sup: 2.8080; 2.7604; 2.7160; 2.6720