A pick-up in demand is causing a surge in spot copper prices this Monday. Following a retreat in the last trading session, copper prices are up strongly this Monday, gaining more than 2% as demand for the red metal picked up.
Also helping boost the prices of risk-driven commodities this Monday is the weakness of the US Dollar, which finds itself on offer as a result of the Fed’s recent dovish posture regarding US interest rates. Copper prices maintain their upward trajectory after several institutional players have all called for copper to hit new highs in 2021, with Goldman Sachs calling copper “the new oil” and the core of the green energy transition. Copper price is up 2.05% as of the time of writing, trading at 4.2350.
The breakout move from the symmetrical triangle on the daily chart has been reinforced by today’s surge, with the price candle forming a bullish engulfing pattern along with the previous day’s candle. The price action is now testing the 4.2755 resistance level. If the bulls succeed in uncapping this price point, then the next resistance at 4.3995 comes into view. Price would need to take out this new resistance and target the February 2011 high at 4.5465 for copper price action to attain the price projection point of the measured move from the triangle’s breakout point.
On the other hand, a rejection at the current resistance allows for a potential pullback, which targets 4.1250 initially, before 3.9970 comes into view as a potential downside target. A continued decline could place 3.9535 and 3.8340 into the picture as additional downside targets.
