Shanghai copper due for deep correction to 67,000/yuan

SINGAPORE: Shanghai copper faces a strong resistance zone of 68,960 to 69,280 yuan per tonne and is due for a deep correction towards 67,000 yuan.

The current "a-b-c" rebound is approaching an end, as both the resistance at 68,960 yuan, the 61.8 percent Fibonacci retracement on the fall from 71,960 yuan to 64,110 yuan, and the resistance at 69,280 yuan - the 100 percent Fibonacci projection of the wave "c", would prevent copper from rising more from the current level.

In addition, there has not been a pullback towards a descending trendline after it was broken. The anticipated correction provides a chance for copper to revisit the trendline.

Only a rise above 69,280 yuan could completely invalidate the current bearish view.

Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.

No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses.

Copyright Reuters, 2011