Copper extended recovery on Monday after the price was congested in past three sessions. Initial signal of recovery was generated on break above congestion tops at $2.9900 zone, with fresh advance hitting next pivotal barrier at $3.0120 (Fibo 38.2% of $3.1245/$2.9425 downleg).
Daily RSI turned north and slow stochastic emerged from oversold territory, generating bullish signal for extended recovery after the metal suffered heavy losses last week.
Sustained break above $3.0120 pivot is needed to signal further recovery and expose falling daily Tenkan-sen at 3.0335.
Weaker dollar and upbeat data from China, metals biggest consumer, boosted the price on Monday, however, existing bearish setup of daily techs warns of limited correction.
Recovery needs to clear Tenkan-sen barrier for further signals for extension towards daily Kijun-sen ($3.0587) and daily cloud base ($3.0755).
Any early recovery rejection would increase downside risk, as pullback from $3.2580 peak hasn’t finished yet.
Extension below cracked Fibo support at $2.6577 (Fibo 38.2% of $2.4720/$3.2580) and below last week’s low at $2.9425 would signal bearish continuation.
Res: 3.0248; 3.0335; 3.0587; 3.0755
Sup: 3.0000; 2.9855; 2.9577; 2.9425