Copper – recovery attempts face strong headwinds from daily cloud top barrier

Slobodan Drvenica Windsor Brokers

COPPER

Copper extended recovery into second straight day on Thursday, but gains faced strong headwinds from significant barrier at $3.1033 (daily cloud top / Kijun-sen).
Price pulled back on fresh strength of the US dollar and concerns about weaker demand from China - metal’s top world consumer.
Signals from daily chart are mixed as strong bullish momentum supports the advance, but the price was so far unable to break above a cluster of daily MA’s between $3.0840 and $3.0986 and today’s advance capped by 200SMA.
Risk of deeper pullback would persist while near-term price action holds below 200SMA / daily cloud top.
Boundaries of daily cloud are key, as close above cloud top would generate bullish signal for extension towards next strong barriers at $3.1245 (Fibo 61.8% of $3.1935/$3.0130) and $3.1295 (14 May high).
Conversely, return and close below daily cloud would weaken near-term structure for retest of $3.0335 (15 May low) and possible extension towards $3.0130 (08 May spike low).

Res: 3.0986; 3.1033; 3.1245; 3.1295
Sup: 3.0820; 3.0675; 3.0605; 3.0430

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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