Copper Prices Bounce at Critical Fibonacci Support Amid Extreme Oversold Conditions

Copper prices have recently shown signs of a bounce on the 5-hour chart, climbing from USD 6.568 to USD 6.5835. This movement comes amid extreme oversold conditions, with the Money Flow Index (MFI) hitting a rare low of 10.47. Such levels often precede sharp mean reversions, but the overall technical picture remains bearish.

The price is currently below key moving averages, including the SMA 20, 50, and 200, and is trapped under the Ichimoku cloud (USD 6.589-6.718). The SuperTrend indicator is also flashing a sell signal. However, the MFI’s extreme oversold reading suggests potential seller exhaustion, which could lead to a countertrend spike, especially as the price tests the 61.8% Fibonacci support at USD 6.575.

For traders considering bullish positions, an aggressive long entry near USD 6.55 could be viable if a lower timeframe reversal is confirmed. A more conservative approach would wait for a 5-hour close above the SMA 200 at USD 6.64. Stop-losses should be placed at USD 6.46, with targets set at USD 6.69, 6.74, and 6.82.

On the bearish side, aggressive traders might short the price on a rejection near USD 6.60, while conservative traders should wait for a close below USD 6.53. Stop-losses for shorts should be at USD 6.69, with targets at USD 6.46, 6.36, and 6.20. The USD 6.57-6.63 range is considered a 'chop zone,' where traders should exercise caution due to the risk of failed breakouts.