Copper price analysis

Tuesday, 20th June 2017 14:31 - by Rajan Dhall

Looking at copper at the moment, we are seeing prices come back right to the most recent value area of around $2.5910. Price seems to be stuck in a consolidation phase between $2.44 and $2.81 as the fundamental drivers surrounding the Trump reflation trade have dissipated.

The industrial metal was also hit but the somewhat more hawkish tone from the Fed last week and this led to a rebound in the DXY and USD denominated commodities all fell as a reaction. Over in China Home prices levelled off in the largest cities in May but continued to climb nationwide, this indicates demand remains resilient despite a series of government measures to keep the market from overcooking.

Recently we have seen some stabilisation in price, with the spot price at $2.56 today close to the middle of the recent value area. Since we hit the low of the range, a new higher low wave was created at $2.502 on 6th June and this makes the $2.64 level very important as it could indicate a technical trend change within this mini pattern with a new wave high. If so we could see a retest of the top of the pattern at $2.811. In terms of support level we could look to $2.525 and $2.552 and resistance levels reside at the phychological $2.60 level and $2.6450. Looking at the RSI the trendline has been broken which could indicate a move higher in price, we are currently above the 50 level which is also a bullish indication and if the supports hold we may see a move higher.