Copper has been trading under pressure as of late. Industrial metal painted and head and shoulder pattern with neckline in the 9,000 area. The neckline has been broken today and a strong downward move followed. Target of the pattern can be found slightly above the 8,400 swing area. This is the first major support to watch for COPPER bears. Seasonal patterns confirm that declines may deepen.
When it comes to fundamental factors, copper prices are being pressured on the USD market as well as rising copper stockpiles in the global exchanges. Deliveries from Peru and Chile are likely to further increase stockpiles in China. Chinese credit impulse (a leading indicator) has also slowed in recent months. On the other hand, we expected rally in the US yields to be limited, which should support industrial metals prices over the medium- and long-term.
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Source: xStation5
