Copper contract for July delivery hit fresh over five-month high on Tuesday, boosted by signs of robust demand from top consumer China, tight supplies and weak dollar. Copper price skyrocketed on Tuesday, marking the biggest one-day rally since early Feb and rallying 3.25% until now. Tuesday’s rally cracked very important barrier at $2.8215 (former recovery high of 12 Feb) and hit new 2017 highs above $2.83 barrier. Strong bullish sentiment can drive the price towards next key resistance at 2.9550 (May 2015 high/Fibo 138.2% projection) on sustained break above 2.8215 barrier. Meanwhile, hesitation at 2.8215, which could results in corrective easing, could be anticipated as daily techs are overbought and bearish divergence formed on daily slow stochastic, as well as on profit-taking action. However, limited downside action is seen, as sentiment remains firmly bullish, with 2.7000 zone (near Fibo 38.2% of 2.4720/2.8315 rally, reinforced by rising daily 20SMA) expected to contain extended dips.
Res: 2.8315; 2.8500; 2.8895; 2.9000
Sup: 2.8000; 2.7670; 2.7467; 2.7155
