A strong rally in copper this afternoon has seen it push up towards 2.06 to test what may be a notable resistance level.
Not only does 2.06 mark the top of the ascending channel that copper has traded within since rebounding off its lows on 15 January, it is also a prior level of support – most recently on 4 January – and the 61.8% retracement of the move from 31 December highs to 15 January lows.
This alone obviously doesn’t mean we’ll see a reversal at this level but it doesn’t highlight it as being a possible level of interest for those looking to sell into rallies.
As of yet, price action has given no indication that we are going to see a reversal off this level but should that appear, it may point to a continuation of the downtrend.
A break above this level on the other hand may suggest that we’re going to see a broader correction in Copper, with 2.138 being the next notable resistance level. A break above here would also bring an end to the period of lower highs, which again could point to a broader correction.