Summary:
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Copper launched new year with solid gains
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Double bottom pattern in play
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200-session moving average could be a target for bulls in the days to come
Beginning of the 2019 was really good for copper prices what can be ascribed to improvement of moods on the global financial markets as well as somewhat more conciliatory tone hit by the US and China officials in relation to trade. In turn, copper prices increased 5% during the first month and a half of the year. Situation on the weekly chart looks interesting. Price bounced off the 200-week moving average and 50% Fibo level of the upward move started in 2016 twice as of late. The potential range of this double bottom pattern suggests and upward move towards $7000 handle. However, bulls need to overcome 2018’s highs first as they constitute the nearest major resistance zone.
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Source: xStation5
Moving onto the daily chart, we can see that the price managed to successfully break above the 50-session moving averages channel and the ongoing decline can be seen as just a corrective move towards the recently broken resistance. 200-session moving average remains the key level to watch for buyers as the price has a chance to test it for the first time since mid-2018. Not far above one can find local peaks from the end of 2018 and bears’ resistance is strong there. In case sellers manage to regain control over today’s trading, buyers may look for a place to regroup around the aforementioned moving averages channel.
Source: xStation5
Meanwhile, copper keeps trading in a strong upward trend on the intraday frame. The latest sell-off was halted by the 200-hour moving average. Right now we are observing price breaking above the 50-period moving averages channel once again, just as it was the case in late January (red ellipsis on the chart below), what may hint at potential test of the latest local peaks near $6250 handle. Two upward sloping trendlines can be treated as the closest support levels. Ongoing trade talks may result in elevated volatility on the copper markets in the upcoming hours therefore traders should keep track of news flow.
Source: xStation5
