Copper (LME) is accelerating in an exponential manner towards the February and August 2011 highs at 9905.00/10190.00 but this ascent isn’t sustainable, according to Axel Rudolph, Senior FICC Technical Analyst at Commerzbank, who expects the metal to see a retracement lower soon.
“Copper has shot up to levels last seen in August 2011 but it is short-term overextended with the daily RSI trading at extreme levels not seen since 2006. Just like back then we expect to see some kind of retracement lower, probably this or next week, for the contract to give back some of its recent sharp gains.”
“While the contract remains above the January trough at 7705.00, we will retain our medium and longer-term bullish view with the February and August 2011 highs at 9905.00/10190.00 being targeted.”
“Minor support in the short-term is seen at the 8437.00 mid-February high and at the 8238.00 January high. Further support comes along the 55-day moving average and the five-month support line at 8021.74/7958.41.”