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Copper Trading at a Channel Support

Copper prices rallied from a low on the year at 2.876 to 3.293 in July. Since then, price has been in some what of a congestion, or triangle pattern. The moving averages and the RSI reading in the daily chart all reflect a sideways market. 

Copper Daily Chart 9/10

(click to enlarge)

This week however, copper price threatening to open up a bearish outlook. First of all note that this week, price respected the falling trendline from 3.293, which showed the weakness of bulls in this market. Price also respected the cluster of 200-, 100-, and 50-day simple moving averages are resistance, which shows some bearish bias. Also, the 9/9 daily candle was a strong engulfing type that signals a bearish continuation at least in the short-term. Now price is testing a rising trendline. 

A break below 3.08 should clear both the trendline support and the 3.082 support pivot. This should open up the 3.002 and 2.876 support areas. 

If we get a pullback, and the market is indeed shifting to a bearish mode, we should see sellers in the 3.15-3.17 area. A break above 3.21 will be needed to revive the bullish outlook.