Copper prices look set to post a third straight day of gains as a weaker US Dollar and risk sentiment in the markets, supported risky commodities on Wednesday.
Most of the risk flows on Wednesday came as a result of Janet Yellen’s calls for the Us Congress to take big actions in promoting stimulus so that economic recovery could follow.
Copper prices had previously declined as a result of a boost of inventory at the LME warehouses. However, two major delivery cancellations to the LME warehouses helped to support copper prices on the day.
Technical Levels to Watch
The advance in copper price has put the resistance at 3.6530 at risk. Converging highs and lows mean that a symmetrical triangle has formed on the daily chart.
A break of the 3.6530 resistance level also breaks the triangle and could lead to an upside charge towards 3.7345 as the initial target. The measured move’s projected price target lies at 3.7945, and bulls need to take out 3.7345 for this outlook to be actualized.
On the flip side, a rejection and pullback from current levels targets 3.5755, which is also the intersection point with the lower triangle border. A breakdown of this area allows the previous high seen on 21 March 2013 to come into play as the initial downside target. Below this area, the 22 May 2013 high at 3.3925 comes into the picture as a second targets to the south.
Copper Price; Daily Chart