Chart of The Day Copper

Copper Probable Price Path & Potential Reversal Zone

The reflation theme appears well and truly alive, propelled forward by gains in the commodity complex. The deep freeze in Texas took centre stage yesterday, particularly with many Asian markets still closed and the US market out for Presidents’ Day. The ongoing freeze in Houston has resulted in the complete shutdown of some oil refineries in the Gulf region, in addition to curtailing electricity output to households and businesses. WTI closed above $60 for the first time in more than a year as a result of the weather crisis. Brent added 1.4% on the day to close at $63.30/bbl. Meanwhile, copper continued to climb and closed at a fresh 8- year high yesterday.

From a technical and trading perspective, Copper is entering an area that may prove to be the catalyst for a corrective phase to develop. Counter trend player will be paying close attention to the price action at the 3.92/4 level, this area represents the monthly R3 pivot point, the primary projected ascending trendline resistance and projected weekly range resistance, it is also noteworthy that we currently have, momentum divergence developing, while this divergence remains in play, watch for bearish reversal patterns from the reversal zone to deploy counter trend short exposure, initially looking for a retest of 3.70 from above enroute to an ideal 3.50 test of the primary trendline support. A successful test and hold of this level would allow position reversal to align with the dominant uptrend.

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