Having failed to beat a key resistance at $7,131, copper looks set to drop to $6,056 per tonne on the London Metal Exchange (LME) in three months., according to Reuters technical report.
Key points
The resistance is identified as the 38.2 percent Fibonacci projection level of an upward wave (C), the third wave of a three-wave cycle from the 2008 low of $2,825. The failure has triggered a pullback towards a trendline falling from the 2011 high of $10,190. The pullback may end around $6,056.
So long as copper manages to hover above $6,056, an inverted head-and-shoulders developing between Jan. 16, 2015 and July 21, 2017 will remain valid. It suggests a target around $8,001.
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