Copper Price Outlook: Pullback On The Cards As US-China Trade Tensions Escalate

A break of channel support could result in price falling back to the monthly low (2.8194), with the RSI diving below 50 probably coinciding with a sustained decline to the yearly open (2.7792).

On the other hand, bullish momentum may intensify should the RSI fail to slice through its neutral midpoint and support hold at the August low (2.8914), potentially generating a push back towards the 2019 high (2.99).

Copper (XCU/USD) Weekly Chart - Technical Indicators Remain Bullish

(Click on image to enlarge)

Copper weekly chart created using TradingView

Zooming out to a weekly timeframe reinforces the longer-term bullish outlook for the commodity as the RSI and MACD indicators surge to their highest respective levels since late-2017.

Moreover, the gradient of the trend-defining 50-week moving average (2.6140) hints at building bullish momentum and could fuel further buying should it cross above its 200-week (2.7022) counterpart in the coming months.

To that end, although a short-term pullback looks likely in the near-term, copper remains poised to trek higher in the latter half of 2020.

A weekly close above key resistance at the 2019 high (2.99) is needed to validate bullish potential and would probably signal a resumption of the yearly uptrend.

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