Commodity Trading Tips for Copper by Kedia Commodity

Ajay Kumar Kedia 25 July 2013

Copper Copper yesterday settled down -0.52% at 419.65 as pressure seen on the back of weak Chinese manufacturing data but downside was limited as the dollar retreated and the euro zone unexpectedly bounced back to growth. Data showed that manufacturing in China, the world's biggest consumer of copper, lost momentum in July and that its job market weakened. The preliminary reading of China's HSBC manufacturing purchasing managers' index fell to 47.7 in July, from a final reading of 48.2 last month. Analysts had expected the index to rise to 48.6. A reading below 50 indicates a contraction. Copper continued to be supported after China's premiere said Tuesday that economic growth must remain above 7%. Last week's China's central bank said it was removing the lower limit on interest rates for banks, to help spur growth. Fed Chairman Ben Bernanke said last week that the pace of the bank's bond purchases would depend on U. S. economic health. The euro rose against the dollar, buoyed by signs of recovery in the euro zone. Private industry unexpectedly bounced back to growth this month as factories increased output for the first time in well over a year. US new home sales jumped 8.3% to 497,000 in June, the highest since May, 2008. The surge in new home sales will boost housing construction and home prices, thereby spurring the US economy. The US manufacturing PMI for July was 53.2, also beating forecasts. These upbeat figures signal strong recovery in the US economy, but also raised expectations that the US Federal Reserve may begin to taper off QE3 in September. Now Copper is getting support at 416.90 and below same could see a test of 414.20 level, And resistance is now likely to be seen at 422.85, a move above could see prices testing 426.10.