Copper price is down 0.26% today as risk aversion swept through global markets and US President Donald Trump ruled out any renegotiations of the US-China trade deal signed last year.
Copper price, which is linked to the Chinese economy, went on the back foot after US President Trump reiterated his stance that there was no renegotiating the phase-one trade deal with China and that the US government would explore the possibilities of seeking financial compensation from China for lack of disclosure about the coronavirus outbreak. The US tops the list of new infections and mortalities from the coronavirus pandemic, which has so far affected nearly 4.5million people worldwide.
Copper price action continues to trade in the recovery phase from the lows of March 2020, with the price candles locked in an ascending channel. Today’s price candle is that of a pinbar which is resting on the lower border of the channel as well as the support zone located between the 2.30297 support line (floor) and the 1.30574 price level formed by the 38.2% Fibonacci retracement level from the swing high of 17 January to the swing low of 19 March. A bounce from the support level allows the copper price to push upwards, targeting the opposing channel border. However, this bounce requires a break of the 50% Fibonacci level at 2.41116 to successfully attain the upper channel border, which could touch off the 2.46254 resistance. Further upside targets at 2.49154 and 2.53518 are also viable targets, but the 61.8% Fibonacci level of 2.51658 could be a pitstop on the way to the latter. The 200-SMA dynamic resistance also lies ahead and could become an essential factor in the scheme of things as far as price action is concerned.
On the flip side, a breakdown of the channel targets the support zone mentioned earlier. Support targets at 2.21109 and 2.13501 could become relevant if the copper price candles can overcome this support area. Between the support levels just mentioned, the 23.6% Fibonacci price level at 2.17531 may also come into play for sellers seeking another target for short term returns.