Copper futures for July delivery started a new bearish phase on the four-hour chart after their impressive rally matured near a new record high of 4.883.
Having crossed below its 20- and 50-period simple moving averages (SMAs), the price is currently refusing to fall below the Ichimoku cloud, but the momentum indicators suggest that the bears may persist in the short term as the RSI is stretching its downtrend below its 50 neutral level, while the MACD has stepped into the negative area and is pointing lower.
In the event the price breaks below the cloud seen around 4.648, traders may look for immediate support within the 4.567 – 4.496 restrictive region. Should the bears claim that territory, violating the upward pattern in the bigger picture, the sell-off could pick up steam towards the swing low of 4.411.
Otherwise, a bounce above the nearby 4.690 resistance level should also expand beyond the 20-period SMA to raise buying interest towards the key 4.820 barrier. A step higher could re-challenge the record of 4.883 before the target shifts to the 5.000 psychological mark.
In brief, copper futures are exposed to additional downside corrections in the near term, with traders waiting for a confirmation below the cloud.