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Copper Price Technical Forecast: A Struggle for Momentum

Copper Price Technical Forecast: A Struggle for Momentum

Mahmoud Alkudsi, Analyst
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Copper Technical Analysis

Copper Price – Bulls Ease Up

On May 11, Copper rallied to an eight-week high at $5.371. However, the price declined after, as some bulls seemed to cut back. As a result, the price closed the weekly candlestick on Friday in the red with a 1.7% loss.

Alongside that, the Relative Strength Index (RSI) remained above 50, indicating that bullish momentum was still intact.

Copper DAILY PRICE CHART (JULy 17, 2018 – May 18, 2020) Zoomed out

copper daily price chart 18-05-20 Zomed out
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Copper DAILY PRICE CHART (FEB 19 – May 18, 2020) Zoomed In

copper daily price chart 18-05-20 Zomed in

Looking at the daily chart, on April 7 Copper started a bullish momentum creating higher highs with higher lows. On Wednesday, the price declined to the current trading zone $5.010- $5.239. However, on the following day the market failed to overtake the 50-day moving average reflecting that bulls were not done yet.

A close above the high end of the aforementioned trading zone may cause a rally towards $5.519. A further close above that level could extend the rally towards $5.735. Nevertheless, the weekly resistance levels underscored on the chart (zoomed in) should be considered.

On the other hand, any failure in closing above the high end of the zone highlights bull’s hesitation. In that scenario, the price may double top and reverse lower, if breaks and remains below the neckline residing $5.146. A further close below the low end of the zone could encourage bears to press towards $4.484. That said, the weekly support areas marked on the chart should be watched closely.

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COPPER Four-HOUR PRICE CHART (April 3 – May 18, 2020)

Copper four hour price chart 18-05-20

From the four-hour chart, on April 23 Copper corrected its uptrend and created a lower high at $5.210. Later on, the market rallied and traded in a bullish channel. On Thursday, the price rebounded from the lower line of the channel then reversed higher eyeing a test of the higher line.

A break above $5.376 may cause more bullishness towards $5.463. Although, the weekly resistance level printed on the chart should be kept in focus. In turn, any break in the other direction, i.e. below $5.113 could send Copper towards the low end of the current trading zone discussed on the daily chart. However, the daily support level underlined on the chart should be monitored.

See the chart to know more about the key technical levels in a further bullish/bearish move.

Written By: Mahmoud Alkudsi,Market analyst

Please feel free to contact me on Twitter: @Malkudsi

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.