Copper yesterday settled flat at 420.05 fell for the first time in three days on signs that that the economy may expand less than the government forecast in China, the world’s biggest consumer of industrial metals. Better than expected earnings reports by JPMorgan and Wells Fargo last Friday pushed S&P 500 and Dow Jones to fresh record high. However, the rally of the US dollar index put downward pressure on commodity prices. Selloff at highs deprived copper prices of upward momentum. The Fitch Ratings downgraded France’s credit rating from “AAA” to “AA+”, with a stable outlook. Lou Jiwei, China’s Finance Minister sparked apprehension over China’s economic growth by saying in a summit in Washington that there is no big problem with a growth rate of 7% or 6.5%. Meanwhile, investors are cautious ahead of Monday’s Chinese 2Q GDP. As a consequence, LME copper pulled back from high levels to $6,910/mt before finally closing at $6,953/mt, down 0.7%. University of Michigan's July CCI was 83.9, worse than 84.1 expected; Federal Reserve Bank of Philadelphia President Charles Plosser and St Louis Fed Chairman Bullard gave a speech. Charles Plosser expressed the US Fed should begin to scale back bond purchasing in September, and quit bond purchasing at the end of the year, while Bullard believes the Fed needs more easing policies given sliding inflation data. Fitch downgraded France's rating from AAA to AA+ as the country's economic recovery is worse than expected, and maintained its outlook steady because France will not negatively affect European debt crisis. This weighed down the euro. China's economic data released last weekend including June power generation volume, M2 growth and newly-increased loans were not optimistic. Technically market is under fresh buying as market has witnessed gain in open interest by 0.97% to settled at 23393 while prices up 0.35 rupee, now Copper is getting support at 419.4 and below same could see a test of 418.75 level, And resistance is now likely to be seen at 420.6, a move above could see prices testing 421.15.

Trading Ideas:

Copper trading range for the day is 418.8-421.2.

Copper settled flat after comments from Chinese government official triggered concerns that economic growth in China could fall short of targets.

China's finance minister signalled that Beijing may be willing to tolerate economic growth in the second half of the year significantly below 7%

Supply disruptions that have underpinned the copper price in recent months are diminishing.