TradingLounge Copper Commodity Elliott Wave Analysis

Copper prices have been in a notable downtrend since peaking in May 2024, marking a pivotal market reversal. Since May 21st, 2024, the metal has lost nearly 18% of its value. Despite a recent bounce, this movement appears to be a corrective phase within the broader context of a strong rally that started in October 2023. The ongoing correction seems to be forming a typical three-wave structure, a key aspect of Elliott Wave theory, suggesting that further downside movement is likely before the long-term uptrend resumes.

Copper Elliott Wave Technical Analysis

Long-Term Copper Chart Analysis

Examining Copper's long-term trend, particularly from March 2020 onwards, the metal seems to have developed a diagonal structure at the supercycle degree. In this analysis, Wave (I) ended in March 2022, followed by Wave (II) in July 2022, and the expansive Wave (III) concluded in May 2024. Currently, the market is unfolding Wave (IV), emerging from the May 2024 peak. This wave appears to be forming a double zigzag pattern, a common corrective structure in Elliott Wave analysis, which typically indicates a complex correction phase before the primary trend resumes.

Copper Daily Chart Insights

On the daily chart, evidence suggests that the cycle degree Wave w of (IV) was completed in early August 2024. This led to the ongoing corrective bounce, identified as cycle degree Wave x of (IV). According to Elliott Wave principles, cycle degree Wave x should ideally form a three-wave structure, and current market activity indicates we are likely in the first leg of this formation. The H4 chart supports this view by showing the price in an impulsive wave rally, specifically in the primary degree Wave A (circled) of cycle degree Wave x.

Copper 4-Hour Chart Analysis

The H4 chart offers a detailed view of this impulsive rally, revealing that the price is in Wave (5) of A (circled). This wave is now entering a crucial Fibonacci resistance zone, which often acts as a significant barrier for the market, potentially triggering a reversal. This zone is expected to serve as resistance, leading to the formation of Wave B (circled) in a decline. While short-term price action may see Copper initiating a bearish correction, the broader long-term outlook still points to a continuation of the downtrend before a sustained reversal is expected. This analysis aligns with the Elliott Wave principle, where corrections and rallies form part of a larger market cycle, eventually leading to the continuation of the primary trend.

Technical Analyst: Sanmi Adeagbo

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