Copper prices continued their steady advance on Wednesday, after exceeding the projected measured move target following the resolution of the bullish pennant on the daily chart. Yesterday, it was indicated in my review of the price action of copper that OCBC bank was projecting a new record high for copper prices.
Currently, Credit Suisse is predicting that copper would at least test the $10,000 psychological level (4.532/pound), having broken past the $8,895 price target for the bullish flag pattern.
The fundamentals continue to support an upsurge in copper prices, with a new coronavirus vaccine from Johnson & Johnson looking good for approval when the team of experts at the US Food and Drug Administration meets on Friday to decide on the issuance of emergency use approval for the vaccine.
Copper price is 3.16% higher on the day and continues to attract fresh bids.
Technical Levels to Watch
The 25 April 2011 high at 4.3995 would be the new upside target for bulls if the current resistance at 4.2755 gives way. This move requires confirmation via a 3% upside penetration close above the current resistance. Above 4.3995, the July 2011 high at 4/5260 remains the only barrier before the copper price can hit the previous all-time high attained in February 2011 at 4.6495.
On the other hand, failure to establish confirmation of a break of 4.2755 could lead to a much anticipated short-term correction, which may retest the 4.2015 level as new support. Below this level, 3.9970 and 3.9535 line up as additional targets to the south, along with 3.8340 and 3.7945.
However, any of these areas may also serve as dip-buying levels, as the trend remains decidedly bullish. It is therefore probable that we could see a short-term correction before bulls make a renewed assault to claim a new high for copper prices.
Copper Price; Daily Chart