Copper eases from fresh high but correction is seen shallow for now

Copper contract for September delivery eased from fresh high at $2.9535 posted last week, after bull-leg from early May’s trough at $2.4720, ran out of steam just ticks ahead of strong resistance at $2.9540 (05 May 2015 high).
Pullback from 2.9535 peak marks the fourth (corrective wave) of five-wave cycle from $2.5385 (21 June low), which should ideally end at $2.8665 (length of wave 2) according to wave theory, before broader bulls resume.
Strong downside rejection on Friday ($2.8705) has generated initial reversal signal, but sustained break above $2.9200 barrier is needed for confirmation.
However, risk of deeper pullback remains on the table as daily RSI has just emerged from overbought territory after forming bearish divergence pattern that is seen as negative signal.
Extension below Friday’s low at $2.8705 and violation of daily higher base at $2.8590 would generate negative signal and risk extension towards rising 20SMA at $2.8487.

Res: 2.9200; 2.9339; 2.9450; 2.9540
Sup: 2.8865; 2.8705; 2.8665; 2.8590