SINGAPORE: LME copper may break a resistance at $6,083 per tonne and rise to the next resistance at $6,167 this week, as suggested by its wave pattern and a Fibonacci ratio analysis.
These resistances are identified respectively as the 61.8 percent and the 76.4 percent projection levels of an upward wave C from $5,725. The metal failed to break $6,083 in its first attempt on Jan. 18. The big white candlestick forming on Jan. 15 represents a strong bullish sentiment, which may help copper overcome this barrier in its current attempt.
However, bulls are to be alerted of the pattern from Jan. 8, which looks like an expanding wedge that could be divided into five small waves. This structure indicates the pattern is ending.
A break below $6,015 may not only cause a loss to $5,946 but also signals a completion of the wedge.
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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.
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