Copper price continued to surge higher as it disregarded the souring of risky sentiment to post an additional 0.88% to its recent price recovery. Copper price on the continuous futures contract on COMEX is presently trading at 2.8225, with the daily candle showing no shadows as the asset attracts full bid.
Driving copper price action are the positive manufacturing PMI results of the previous week, as well as a surge in Chinese stocks, which pushed the Shanghai Composite to a 5.7% gain on Monday; the largest in nearly two years. Furthermore, there has been a drop in global copper stocks by 8,525 metric tonnes, according to data from the London Mercantile Exchange.
Technical Outlook for Copper Price
The copper price chart on the daily time frame shows that copper has exceeded the price levels that constituted the resistance zone. Price activity will need to show a second daily candle close above the 2.8020 resistance to confirm the break of that level and establish a bullish run that targets the 2.8695 resistance level (15/16 January 2020 highs). A price advance above this level takes copper price towards the 2.9795 resistance.
On the flip side, failure to break the 2.8020 conclusively opens the door for a pullback towards the 88.6% Fibonacci retracement (2.7695). The 2.7490 price level, which constitutes the ceiling of the support zone, is the next downside target. Attainment of the potential downside targets at 2.6860 and 2.5535 will require a price decline below the support zone on the daily chart.