Copper prices are currently reaching extremely difficult levels. We keep this page updated throughout trading hours as price action unfolds.
Part 1: Risk Diagnosis
Here's what stands out immediately: Copper is hitting a massive wall between its 200 simple moving average (SMA) and the 50% Fibonacci retracement level. The biggest threat on the table is quick withdrawal. The momentum reading on the 5-hour chart looks bullish and overbought.
Traders need to keep a close eye on the current market structure, key chart patterns, specific risk metrics and active trading areas as buyers test this area.
Part 2: Scenario Playbook
Patience is required here to plan for long positions. Going straight into massive overhead resistance for a long period of time poses a serious risk of getting stuck, especially with technical indicators flashing warning signals.
Part 3: Dashboard Overview
Here are the key technical readings right now:
- Pattern Position:The V-Bottom recovery pattern is now 100% complete.
- Fibonacci Confluence:The 50% retracement level directly coincides with the 200 SMA 6.6312 to 6.6500 USD.
- Candlestick Signal:A bullish Marubozu candle has formed on the chart.
- Current stance:Remaining neutral around USD 6.6533. The price is testing heavy resistance while the Money Flow Index (MFI) shows extremely overbought readings.
- Capital Conservation Alert:Beware of a possible bull trap near USD 6.6800.
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Key Points for Copper Traders
- Copper has achieved a full V-bottom bounce, but is now falling directly below the combined 50% Fibonacci level and 200 SMA between $6.6312 and $6.6500.
- Because indicators show extremely overbought conditions, jumping into fresh breakout buys near 6.6533 USD carries a high risk of getting caught in a bullish trap near 6.6800 USD.
- Unless buyers have clearly moved forward or sellers have made a move for a mean reversion move, it makes the most sense to stay on the sidelines or wait for confirmation.