Copper Prices Test Critical Support Near $6.52 After Sharp Sell-Off

Copper futures prices have fallen sharply, erasing recent gains and testing a critical technical support level near $6.52. The move extends a steep downturn from a recent high of $6.8940, placing the industrial metal at a potential inflection point, according to a technical analysis by Investing.com.

Sellers Dominate as Key Levels Break

The sell-off has pushed copper below several important technical benchmarks, confirming a strong bearish sentiment in the short term. Prices have breached the 200-period simple moving average (SMA), which now acts as immediate resistance around $6.56.

The current price action is hovering just above the 38.2% Fibonacci retracement level of the prior uptrend, located at $6.5237. A sustained break below this support could signal a continuation of the downtrend, with sellers potentially targeting the 50% retracement level near $6.41.

Technical Indicators Signal Oversold Conditions

While the trend is decidedly negative, several indicators suggest the downward momentum may be overextended, raising the possibility of a technical rebound.

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• Relative Strength Index (RSI): The 14-period RSI has fallen to 34.94, approaching the oversold threshold of 30.
• MACD: The Moving Average Convergence Divergence indicator shows persistent downward momentum, reflecting the strength of the recent selling pressure.
• Chart Patterns: The decline was reportedly preceded by the completion of a bearish "double top" pattern, and the appearance of strong negative candlesticks has confirmed seller dominance.

Market Outlook: Key Levels to Watch

For the bearish trend to continue, sellers will need to decisively break the current support around $6.52. Failure to hold this level would open the door to the next major structural support zone between $6.41 and $6.45.

Conversely, due to the near-oversold conditions, a relief rally or consolidation is possible. For buyers to regain any control, the price would need to reclaim resistance, first at the 200-period SMA ($6.56) and then in the more significant $6.60-$6.65 range. Until these levels are overcome, any upward bounce is likely to be viewed as a temporary correction within a broader downtrend.