Shanghai copper is expected to break support at 39,250 yuan per tonne and fall further towards the next support at 38,790 yuan, following the completion of a five-wave cycle from the August 7 low of 37,310 yuan. These supports are identified respectively as the 100 percent and the 76.4 percent Fibonacci projection levels of the cycle. The drop from the August 13 high of 39,970 yuan consists of three waves, with the third wave labelled c progressing towards 38,790 yuan.
Resistance is at 39,710 yuan, the 123.6 percent level, a break above which could lead to a gain to 39,990 yuan, the 138.2 percent level. 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.