Copper is on slick footing, having dropped the most since June 17.
The downbeat MACD and DMA breach favor selling, and the 61.8 percent Fibonacci retracement is testing the downside.
Copper is down 1.02 percent intraday around $4.2350, putting it on the back foot for the fourth day in a row. The red metal so breaches the 100-day SMA (DMA) for the second time, undoing the previous week’s breakout.
Copper’s drop to the month low near $4.0880 can’t be ruled out, given the downbeat MACD conditions encouraging commodity sellers. A daily close below the 61.8 percent Fibonacci retracement of the March-May upswing, which is at $4.2400, is required.
The 78.6 percent Fibonacci retracement level of $4.0640 and the $4.0000 threshold, not to mention March’s low of $3.9420, also operate as downside filters.
In the meanwhile, recovery moves require not only a daily close above the 100-SMA level of $4.2625, but also a sustained run-up above the most recent swing high of $4.3425 to keep the bulls in charge.
Following that, copper bulls may be enticed by a 50% Fibonacci retracement level of $4.3650 and numerous lows set since late April around $4.4300.
Bearish trend
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