False Breakout Turns Copper Bearish

In today’s technical analysis, let’s take a look at copper, which is currently showing a very negative technical picture.

The key element here is the wedge pattern marked with black lines. This type of formation is typically a trend continuation pattern, suggesting a breakout in the direction of the prior trend, which in this case pointed to the upside.

And initially, that breakout did happen.

However, it quickly turned into a false breakout.

The price failed to hold above the upper boundary of the wedge and dropped back inside almost immediately. At the same time, we saw a manipulation of long-term highs around the green resistance area. That move likely trapped buyers who entered on the breakout.

This combination, a failed breakout and rejection from key highs, is a strong bearish signal.

From a technical perspective, this kind of setup often leads to a deeper move in the opposite direction, as trapped buyers start exiting positions.

As a result, sentiment on copper is clearly negative right now, and the expectation is for further downside in the near term.

Source: https://www.axiory.com/analytics/technical-analysis/false-breakout-turns-copper-bearish