Copper futures have come under renewed selling pressure in recent sessions, with profit-taking eroding the momentum that drove prices to record levels just a week ago. While the broader bullish trend remains intact, near-term trading is likely to be choppy as technical indicators point to a market searching for direction.
At the time of writing, Comex copper was trading at $6.61 per pound, having slipped below a months-long trendline and the short-term moving average. The pullback comes as the U.S. dollar index, which reached a two-year high of $101.41 late last week, continues to trade near $101.14. A stronger greenback makes dollar-priced commodities like copper more expensive for foreign buyers, dampening demand.
Offsetting the dollar headwind is a persistently tight supply picture. Global scrap copper availability remains significantly constrained, weighed down by low mine outputs and shifting regulatory policies. Analysts also expect China's refined copper output for 2026 to grow at its slowest pace since 2000, a factor that could tighten the market further.
The decline in scrap supply is projected to trigger a sharp slowdown in growth during the fourth quarter of 2026, offering strong support to prices. Some analysts are forecasting an average copper price of $14,500 per tonne in Q4, underscoring the bullish long-term outlook despite the current pullback.
Technical analysis: key levels to watch
On the daily chart, copper has erased gains accumulated over more than a week, dropping to its lowest level since September 17. The decline has pushed the metal below the trendline that provided steady support in recent weeks, and it is now trading under the 25-day exponential moving average (EMA). However, the bulls are defending the medium-term 50-day EMA, which sits near $6.57.
The relative strength index (RSI) is currently at 47 and pointing downward, indicating that momentum is fading but not yet oversold. This suggests that the market is likely to consolidate in the near term, with the range between the 50-day EMA at $6.57 and resistance at $6.80 being the key zone to monitor.
If the bulls manage to reclaim higher ground, further upside may be capped at $6.84. Conversely, a break below the $6.54 support level would invalidate the current bullish thesis and could open the door to deeper losses.
With the dollar's strength and supply tightness pulling in opposite directions, traders are likely to await fresh catalysts before committing to a decisive move. The upcoming economic data and policy signals could provide the next directional impetus for the red metal.
This article is for informational purposes only and does not constitute financial advice.
