Copper prices recovered from the early intraday slump, after the rise in US bond yields slowed, thus providing support to risky commodity assets. Copper prices are still down 0.39% on the day but are well off intraday lows of 4.0105.
Copper prices had risen on Wednesday after supply disruptions in South America’s production fields set off supply concerns. However, the surge in US bond yields to 14-month highs on Thursday proved to be a heavy limiting factor that kept upside price action in check.
Copper price fundamentals continue to favour medium-term bullishness, after China’s industrial activity grew in January and February 2021.
Yesterday’s strong move in the US Dollar violated the triangle to the downside, but the break was not confirmed as the price pulled back into the triangle. Friday’s downside gap quickly found support at 3.9970 and bounced, retesting the triangle’s lower border which now acts as a resistance. A rejection at this border could create a continuation of the breakdown move, retesting 3.9970 as support. This support has to give way for the breakdown to be confirmed, with a projected measured move towards 3.8340. This move also has 3.9535 as a potential pitstop.
On the other hand, a push above the triangle’s lower border, followed by a bullish follow-through move towards 4.2015 invalidates the downside violation. A continuation move then targets the 4.5260 as the price projection point, if the pole of the pattern from the 8 February candle is considered as the start of the evolving bullish flag. This move requires bulls to transcend the 4.2755 and 4.3995 resistance price points along the way.
