Copper future contract for December delivery fell further on Wednesday, extending pullback from three –year high at $3.2580 posted on Monday.
Fresh bearish extension on Wednesday dented strong support at $3.1770 (former high of 05 Sep/Fibo 23.6% of $2.8930/$3.2580 rally) and shows signs of further easing as bearish signal is generating on reversal of daily RSI and slow stochastic from overbought zone. Firm break here would risk bearish extension towards next strong supports at $3.1186/10 (Fibo 38.2%/Monday’s low/rising 10SMA). Break here would sideline bulls and signal deeper correction.
Markets are closely watching the announcement from China’s Communist Party Congress which started today and has boost of manufacturing and construction activities in the agenda.
China is the top consumer of metal and strengthening of these sectors signals higher demand and higher price of Copper. Traders expect more negative tones from the meeting which could signal deeper correction but larger picture shows strong uptrend which is expected to resume after correction.
Res: 3.2145, 3.2415, 3.2580, 3.2855
Sup: 3.1715, 3.1345, 3.1110, 3.0755
