Copper Stalls at Strong Resistance

The short-covering rally has brought copper to two months highs on Friday as investors exited their short positions, mainly due to heavy oversold conditions. The metal was seen flattish on Monday, posting what appears to be an inside bar, which could indicate bears might return to the market soon.

The price stopped at previous highs in the 2.87 USD region and may continue lower again. However, if this resistance is breached, a quick acceleration toward the key selling zone at 2.95 USD could happen. Bears need to defend this resistance of previous lows, or the downward trend would end.

Demand zone could be found at 2.75 USD and while the price stays above, the short-term outlook seems bullish. Should bears push copper back below this level, the next target might be around 2.68 USD.

The area between the resistance of 2.87 USD and the support of 2.75 USD looks like a dead zone - ergo some consolidation could occur. The direction might be set when breaking above or below these mentioned levels.

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