Copper futures (September delivery) experienced the most aggressive weekly damage in a couple of years, plummeting by 10% to a 16-month low of $3.685 per pound on Friday.
The bears are currently aiming for a close below the January 2021 high of $3.729, which could directly drive the price towards the nearby support region of $3.480, while deeper, the 2018 high of $3.329 will come next under the spotlight. Technically, the odds are favoring additional declines as the RSI and the MACD maintain a clear negative slope in the bearish area, though they both have reached their 2020 lows, signaling that the freefall in the market might soon take a halt.
If that bullish scenario unfolds, the price could initially test today’s resistance of $3.800 before meeting the constraining zone around $3.960. Breaching the latter, it may then attempt to resume its broad neutral trajectory above the $4.000 psychological mark.
To summarize, Copper futures are still under risk of more downside, but some stabilization cannot be ruled out as the market is already trading in oversold waters.