Copper Prices Remain Beaten Down

Anna Coulling | Jan 12, 2016 06:24AM ET

The start of the new year has seen no let up in the torrid time for commodities and commodity currencies, but for copper the continued uncertainty in China coupled with US dollar strength and lack of global economic growth continues to weigh particularly heavily, with the base metal breaking through the psychological $2.00 per lb price point, and currently trading at $1.965 per lb at time of writing. From a technical perspective it was the dramatic increase in volume on the 7th January that signaled the pick up in bearish momentum, with the commodity breaking below the volume point of control in the $2.065 per lb area whilst simultaneously taking out the potential platform of support in the $2.050. This was duly retested the following day with yesterday’s price action picking up the pace once again, and with only a low volume node now on the horizon, this is likely to be taken out in due course.

The weekly chart for copper sums all this up very neatly, with the trend monitor on that timeframe continuing to remain firmly red, and with the VPOC adding sustained pressure from above the longer term outlook remains very bearish. Last week’s price action was pivotal, taking prices well away from the recent congestion phase of December last year. As always, until we see the start of any buying climax followed by an extended congestion phase, the technical picture for copper remains bleak.

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Written By: Anna Coulling

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