Copper future contract for December delivery extended recovery on Tuesday and spiked to one-week high at $3.2355, signaling higher low formation. Pullback from fresh over three-year high at $3.2580, posted last week, was contained by ascending Tenkan-sen at $3.1375, with formation of reversal pattern and subsequent bounce, signaling that corrective phase might be over. Today’s recovery extension spiked above Fibo 76.4% of $3.2580/$3.1375 pullback, but was so far unable to hold gains. Fresh near-term bulls off 3.1375 low need close above $3.2120 (Fibo 61.8%) for bullish signal and to re-focus $3.2580 peak. Conversely, failure to hold today’s gains and return below rising Tenkan-sen (currently at $3.1703) would increase downside risk on revisiting correction low at $3.1375. Overall picture remains bullish as investors are optimistic about prospects for global economic growth, although remain cautious on existing risk of slowdown, especially in China, metal’s top consumer.
Res: 3.2000; 3.2120; 3.2355; 3.2415
Sup: 3.1810; 3.1703; 3.1510; 3.1375
