A resurgence of coronavirus cases in China and across the world is starting to spook commodity investors, and copper price may have begun to feel the pinch. Copper price action is currently down 1.27% as market sentiment swayed into the risk-off territory after China reported the highest daily rise in new cases over the weekend, necessitating a partial lockdown of Beijing.
The resurgence in new infections follows the easing of lockdowns across the world. China consumes most of the world’s commodity ores, and copper is very high on the list of raw materials gobbled by its factories which have a voracious appetite for them. Investors are taken note and have placed the metal on offer, leading prices to drop towards the 2.5655 price level.
Copper price has drifted into a support zone which has 2.6015 as the price ceiling and 2.5180 as the price floor. This price floor corresponds to lows seen on 27 August and 1 October 2019, and 3 March 2020. A break below this price floor allows the copper price move to target a previous low of 18 November and 23 December 2016, as well as an earlier high of 23 May 2020 at 2.4485. Various short term support levels exist at 2.3580 and 2.3105; these are all potential short-term targets for falling copper prices.
On the flip side, a break above the price ceiling of the range may follow a bounce on the 200-SMA line, which lies within this range. This price move could then target the resistance zone around 2.7490. 2.8695 will in reality, only become possible if demand for copper rises in the market.