Copper price action resumed its slide after failing to sustain the price recovery above a critical resistance area, in what ended up being a rollercoaster day of trading on Tuesday. I had noted in an earlier analysis that recovery was probably due to profit-taking pullback by sellers and that a lack of improvement in the core fundamentals may cause the bearish sentiment to return. This has been the case after copper prices pushed out of the ascending channel, having failed to break the 2.35167 intraday resistance of Monday and Tuesday. Tuesday’s price candle opened with a bearish gap below the channel, but attempts at covering the downside gap were met by resistance at the 38.2% Fibonacci resistance line formed by the 2.30297 price level.
However, Wednesday has brought a price recovery from yesterday’s lows as risky sentiment returned to the market.
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Yesterday’s bounce triggered today’s price recovery on the 30 March lows at 2.13501. The daily candle is presently targeting a retest of the resistance zone formed by 2.30297 – 2.30574 price range. If the price can break above this range, then there is a chance that copper price could aim for the next resistance at 2.35167. The 50% Fibonacci retracement at 2.41116 could also come into play if further advance ensues.
However, if price falters at the resistance range which has 2.30297 as the lower barrier, we could see a resumption in the downtrend once more, targeting 2.17531 (23.6% Fibonacci retracement) and quite possibly yesterday’s low at 2.13501.
Risk-on/risk-off sentiment continues to dominate copper price action, and price may keep oscillating between nearby support and resistance areas as copper prices seek for clearer direction.