Copper, a key industrial metal, bounced from June lows on Wednesday (July 10), breaking the 20-day moving average. It held gains into the end of last week as the USD weakened. The move has followed through today (July 15) on the back of better than expected Chinese Industrial Production data.
The engulfing nature of the July 10 candle was a strong bullish signal. The move from Wednesday’s close has already moved 50% of the Daily ATR and has an initial target at R2 and 2.7311. However, there is a strong resistance zone around 2.7000 which includes the confluence of R1, the 50-day moving average, and the 23.6 Fibonacci level. A break of R2 would then put the July high and 38.2 Fibonacci level at 2.7525 in sight, with further resistance at the 200-day moving average and the 50.0 Fibonacci level at 2.8000.
The low last week was first established following the steady declines from the April congestion zone over 2.900. The current key support zone around 2.6200 was also in play during January following the 2019 low on January 3 at 2.5740. The Oscillators (MACD and Awesome Oscillator) remain below the key Zero line and RSI at 46, although rising, is in the neutral zone.
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