European Union Foreign Exchange

Copper futures struggles near 23.6% Fibonacci mark; neutral in short term

Copper futures are challenging the 23.6% Fibonacci retracement level of the upleg at 3.1163 from the low on May 2017 to the high in December 2017. Prices remain under pressure as the 20 and 40 simple moving averages on the daily timeframe are acting as significant resistance levels near 3.1700.

Technically, momentum indicators are pointing to a negative bias. The RSI indicator is moving slightly below the 50 level and is pointing south while the %K line of the stochastic oscillator is attempting a bearish crossover with the %D line. Also, 20-day and 40-day SMAs are following the downward momentum, suggesting steeper declines.

Copper  HGCOP MAY18 16032018

If prices continue to head lower and drop below the 23.6% Fibonacci mark, support could come at 3.0400. A stronger barrier, could be found at the 38.2% Fibonacci slightly below the 3.0000 psychological level.

However, should an upside reversal take form, immediate resistance could likely come at 3.2855 and a break above this area could extend gains towards the next barrier at 3.3175 taken from the high in December.

by Melina Deltas, XM Investment Research Desk