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A technical look at copper

Commodities 2 minutes to read

Kim Cramer Larsson

Technical Analyst, Saxo Bank Group

Summary:  Technical analysis of the weekly copper chart shows downside risks.

Following on from today's Morning Call, in which we discussed the $255 level as significant support in copper, we expand our analysis to the broader technical picture as seen on the weekly chart.

Essentially, the $255 support area is key because it represents the neckline of a shoulder-head-shoulder formation. The head is oddly shaped, and almost resembles a double or triple head, but this is a clear enough shoulder-head-shoulder formation nonetheless.

If we see a close below the neckline, which marginally slopes upward, it could fuel a sell-off that could take copper down to around $210. I would, however, wait for a close below the $255 level illustrated by the blue horizontal line.

That level has been tested a couple of times and seems to be quite strong. 

(Note: horizontal lines are always stronger support/resistance levels than up/downwards sloping trendlines.)
Copper
Source: Saxo Bank
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