- Copper is bid and eyes a break of the 38.2% Fibonacci level near $3.8070.
- Bears are moving in on the US dollar as DXY edges below 104 the figure.
The price of copper has been attempting to correct as the US dollar is faded on rallies above 104 the figure as measured by the DXY index. The bulls are accumulating copper following a drop from the $4.50s earlier in June and have their eyes set on a move back to test higher. The following illustrates a bearish bias on the US chart and a bullish bias for copper:
DXY H1 chart
Copper daily chart
According to early indicator data from Bloomberg, economic activity picked up in June after financial hub Shanghai lifted its lockdown and this too is supporting the bullish outlook for the metals sector. A break of the 38.2% Fibonacci level near 3.8070 opens the risk to a deeper correction in order to mitigate the price imbalances as illustrated in the chart above. This will reveal the pathway towards the 78.6% Fibo.
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