Copper futures with delivery in September tumbled towards a fresh one-year low near 2.6700 over today’s trading session and are set to complete the sixth consecutive negative week. Prices remain under pressure as the 20- and 40- simple moving averages (SMAs) in the daily timeframe are acting as significant resistance levels.
Technically, momentum indicators are pointing to a negative bias. The RSI indicator is moving in the oversold zone and is pointing south while the MACD oscillator is strengthening its bearish momentum below the trigger and zero lines.
If there is a continuation of the strong sell-off, investors would turn their attention towards the next immediate support of 2.6370, taken from the low on July 7. A stronger barrier could be found at the 2.5100 hurdle, identified by the trough on June 6. Below that, the commodity would be able to hit the 2.4700 handle.
However, should an upside reversal take form, immediate resistance could likely come from the 20-day SMA at 2.8644 at the time of writing and a break above this area could extend gains towards the next barrier at 2.9320, where it bottomed on March 26. Then a leg above this zone, the price could meet the 3.0050 resistance, which stands around the 40-day SMA.
In the bigger picture, the outlook remains strong negative after the pullback on the 3.3294 high, while the short-term moving averages recorded a bearish cross on June 3, signaling downside pressures.
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