Copper price falls amid heavy seller pressure and oversold conditions

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Copper drops 1.32% today to $6.39

Highlights

Copper prices fell as a sharp pullback in AI-related equities reduced demand for cyclical and risk-linked assets.
Increased volatility led to abrupt price swings in copper futures, prompting a shift toward more defensive trader positioning.
Bearish momentum dominates with copper forecast to trade between $6.3591 to $6.4343 over the next two to three days, as technical signals show no reversal.

Risk aversion grows as AI stock selloff weighs on copper demand

Copper prices have faced downward pressure following a recent selloff in AI-related equities, which reduced risk appetite for industrial metals, as reported by Bloomberg. This shift in sentiment curtailed demand for copper as investors reallocated away from cyclical and risk-linked assets. Additionally, heightened market volatility, as highlighted by 247wallst, underscored abrupt price swings in copper futures and contributed to a more cautious positioning among traders.

Bearish momentum intensifies as sellers dominate below moving averages

On the h1 timeframe, HG trades below both the MA-20 and MA-50, reflecting persistent selling interest in the near- and medium-term, yet remains above the daily MA-200 which preserves the longer-term constructive structure. The immediate resistance is marked by the Ichimoku Kijun at $6.5028, while support rests at $6.3591. Momentum indicators are decisively bearish: both MACD and ADX confirm prevailing downside momentum. RSI, Stoch RSI, and CCI are now registering oversold conditions, suggesting extreme short-term negativity. Bull/Bear Power shows a clear dominance by sellers and the Awesome Oscillator further reinforces the prevailing downtrend.

Downside risks build as support failure threatens further declines

Over the next two to three trading days, copper is expected to consolidate within a range between $6.3591 and $6.4343, reflecting its typical volatility band relative to current levels. The probability of an upward breakout is considered very low, while further downside remains the dominant scenario. A failure of support at $6.3591 would open the way for additional losses, whereas a bullish reversal would require a sustained breakout above immediate resistance near $6.5028.

Viktoras Karapetjanc, expert at Traders Union, notes that copper’s recent weakness stems from both softer risk appetite following the AI equity selloff and increased market volatility. He sees the long-term structure as resilient, with fundamentals for industrial demand intact despite current selling pressure. Near-term sentiment remains negative, but strategic buyers may look for opportunities if support holds. "Copper’s correction reflects short-term fear, yet the intact long-term trend keeps me constructive on future gains."

Earlier, analysts noted that investor positioning in copper was being shaped by both long-term supply developments and near-term fluctuations in market sentiment tied to broader risk assets. The latest technical setup reinforces a cautious outlook, with downside risk prevailing and support at $6.3591 remaining the critical level to watch for any acceleration in selling pressure.

Source of Data: HG Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.