Copper prices have rebounded slightly this Friday, but there are still fears that it could still head lower. Metals research agency Fitch Solutions has warned that early signs of copper price weakness are starting to show. The agency issued the warning on Friday, citing concerns associated with the US Dollar’s value and copper inventories that are starting to pick up.
Fitch says that the rally in copper prices has been much stronger than anticipated, and that bullish underlying factors are starting to drop off; a situation which could continue for the rest of the year. Fitch also notes a decline of nearly 30% in the net long positions in copper since February.
Copper price bounced with an upside gap this Friday, as the USD initially picked up weakness and is up by 1.77% as of the time of writing.
Copper price activity on the daily chart shows that the breakdown move from the triangle was truncated at the 3.9535 support level, but is nowhere near the price projection for the measured move. This point is at the 3.7345 support level. For this move to be completed, bears would be looking to sell into the present rally, which could see copper price pulling back from present levels or the triangle’s lower border. This move would have to retest 3.9970 and 3.9535, take out these levels, and drill below 3.8340 and 3.7945 to be attained.
On the other hand, an extension of the advance above the triangle’s apex invalidates the downside move and points to a reassertion of the uptrend after the triangle top retracement. This recovery has to uncap 4.2015 and 4.2755, along with the 2021 high at 4.3755 for the uptrend to resume.
