Copper Tests Neckline After Head and Shoulders Break

In today’s technical analysis, let’s turn our attention to copper, which has been through some heavy swings recently. After a sharp decline at the end of July, the first weeks of August brought a bullish correction. However, it looks like this correction is running out of steam and that the market may be preparing for its next decisive move.

On the chart, a head and shoulders pattern has formed — a classic reversal setup. Importantly, the price already broke below the black neckline, which makes this formation active. At the moment, copper is testing this neckline from below, with buyers trying to push the price back above and sellers defending it as a new resistance. The outcome of this battle will be crucial for the next big swing.

If the price bounces lower from the neckline, the signal to sell will be confirmed, with the natural target being the blue horizontal support. On the other hand, if copper manages to reclaim the neckline and then break above the orange resistance line (which connects the top of the head and the right shoulder), this would invalidate the bearish setup and instead trigger a long-term buy signal.

Source: https://www.axiory.com/analytics/technical-analysis/copper-tests-neckline-after-head-and-shoulders-bre