Nice bounce off the technical support level in copper

New York (Oct 1)  Copper is another one of those base metals that has had a hard time of late. The price recently made a lower high on the daily chart at $4.31/lb and pushed to move towards the most recent wave low. Today, however, the price is up 1.81% after starting the European session down 0.78%.

Looking at the technicals, the price has hit the blue zone where there had been support on at least three occasions in the past. Most notably on the trendline (orange) after the firm move down in August. Looking ahead, the copper bulls are not out of the woods just yet. The recent greenback strength has played havoc on commodities markets and this could just be a pause for breath. Having said that, the price could move back to the volume point of control (VPOC) as it is usually a magnet for the price.

On the bullish side, if the price attacks the purple downward sloping trendline it would be a good sign that there is still fight left in the bulls. Another key zone is the green resistance at $4.38/lb. This would move the price into the next distribution and potentially to the high on the chart of $4.88/lb. Lastly, on the downside, a break of the blue zone could lead to a test of the $3.85/lb support area and the issue is that there is not much support below there. For now, this support looks strong and needs to be watched.

KitcoNews