Copper Approaching Significant Resistance

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Copper prices recorded a lower close on Wednesday but according to technical chartists at Barclays Capital the price action wasn’t enough to signal a turn in what has been a positive short-term trend.

While the group continues to view the metal as in a late-stage advance it remains aware of the fact daily momentum indicators are looking very much overbought. At the same time the chartists point out there is a virtual wall of resistance on the charts at levels between US$8,100-$8,335, which is just above the current market price.

As a result the group continues to look for signs the market is topping out, suggesting a daily close below US$7,820 would confirm such a top and clear the way for a move to the downside to test the open gap at US$7,590-$7,665 and possibly below.

Medium-term the group continues to expect a large triangular correction pattern will unfold prior to a further test of previous highs at around US$8,800.

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