Copper futures reached overbought levels according to the RSI and reversed lower after touching the 26-month peak of 3.0898 achieved on September 1.
While the aforementioned technical indicator continues to slow down, mirroring the market’s bearish behavior over the past three days, the indicator is still moving in bullish territory, flagging that a recovery could reemerge in the short term. On the other hand, the MACD is holding below its trigger line, which supports the pullback.
In case the pair changes its short-term direction to the upside, the bulls will probably challenge the previous top at 3.0898. A break higher, could last until the 3.3395 barrier, taken from the peak back in June 2018.
Alternatively, additional declines may drive the price towards the 2.9280 support, which lies near the 20- and 40-day simple moving averages (SMAs). Breaking the ascending trend line too, the 2.7960 barrier comes into view ahead of the 2.6960 level.
Turning to the medium-term picture, the pair switched to bullish mode after the rally off 1.9685 on March.
Summarizing, the bullish bias would be holding until the commodity penetrates the ascending trend line to the downside.
