Copper price slumped on Wednesday (down 1.43% since Asian opening and ahead of US session). The metal extends weakness into second straight day on threats of escalation of US/China trade conflict that would hurt economic growth and reduced demand. Fresh negative signals on China’s threats to use rare earth minerals as a reaction in trade war pushed metal’s price sharply lower. In the situation that the US is imposing tariffs and China retaliates by signals of possible ban on the export of rare earths, there are little chances for any upside action, but rather turning focus fully to the downside. Fresh weakness that emerged after falling 10SMA capped recovery, is on track to fully retrace three-day recovery from $2.6535 (23 May low, the lowest since mid-Jan), with break of $2.6535 pivot to open strong support at $2.6251 (200WMA) and look for full retracement of $2.5420/2.9933 (3 Jan / 17 Apr rally). Firmly bearish daily studies add to negative sentiment on bearish fundamentals, Falling 10SMA ($2.7048) continues to track the downtrend and marks solid resistance which is expected to cap potential upticks.
Res: 2.6870; 2.6965; 2.7046; 2.7155
Sup: 2.6575; 2.6535; 2.6251; 2.6155
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