Copper was sharply lower on Monday as traders took profit after strong rally on last Thu/Fri, when the metal price rose over 6% on optimism over easing trading tensions between the US and China.
Release of China’s Oct services PMI, which showed sector’s slowest growth in over a year, added to downside pressure from profit taking.
Pullback from new high at $2.8215 (the highest since 22 Oct) cracked pivotal supports at 2.7545 (20SMA) and 2.7525 (Fibo 38.2% of $2.6410/$2.8215), with sustained break here to generate signal for further easing after false break above the upper boundary of six-week bear-channel.
Pullback regained bearish momentum, which could help fresh bears to penetrate thickening daily cloud and further weaken near-term structure.
Next pivotal supports lay at $2.7325/$2.7291 (converged 10/55SMA), with break here (also near 50% of $2.6410/$2.8215) to confirm reversal and expose next pivotal support at $2.7100 (Fibo 61.8%).
On the other side, ability to hold above daily cloud would keep alive hopes of fresh attempts higher, but another catalyst would be required as metal’s recent strong price action was mainly driven by news.
Res: 2.7741; 2.8025; 2.8215; 2.8325
Sup: 2.7520; 2.7325; 2.7252; 2.7010