Copper future contract for October delivery entered strong bearish acceleration on Wednesday and extended the second leg of pullback from three-year high at $3.1770, posted on 05 Sep.
The pullback was triggered by overbought conditions of daily studies, but analysts have described the latest strong rally as unjustified, according to market conditions and stronger corrective action could be anticipated
Bears accelerated after loss of strong support at 3.0237 (daily Kijun-sen) which held consolidation in past three days and generated another bearish signal on break below pivotal supports at $3.0000 (psychological support) and 2.9900 (Fibo 61.8% of $2.8745/$3.1770 upleg). The bear-leg that commenced from Monday’s high at $3.0820, marks the third wave of five-wave sequence from $3.1770, which eyes its 100% Fibonacci expansion at $2.9336 for validation.
The latter level marks strong support, reinforced by Fibo 38.2% of $2.5385 rally and rising weekly Tenkan-sen, break of which would generate signal of major reversal.
Res: 2.9900; 3.0000; 3.0180; 3.0237
Sup: 2.9749; 2.9418; 2.9336; 2.9087