Copper settled flat at 446.30 pulled back from a more than one-week high on Thursday, as investors looked ahead to key economic data out of the U.S. and China to gauge the strength of the world’s two-largest economies. On Thursday, the US retail sales were reported down 0.4% in January, worse than the 0.1% drop market expected. Initial jobless claims were up 8,000 during the week of February 8. The weak data caused the US dollar index to weaken, lending support to commodities. The US retail sales fell 0.4% MoM in January, the biggest fall since June 2012, with December’s figure also revised downward. Barclays lowered its forecast for US Q4 GDP growth from 2.6% to 2.2% in the wake of the poor data. Credit Suisse cut forecast for the US growth in Q1 2014 from 2.6% to 1.6%. Initial jobless claims were 339,000 last week, worse than expectation. US stock market was not significantly affected, but the US dollar index declined 0.5%, helping ease pressure on base metals. In China, the People’s Bank of China (PBOC) did not conduct open market operation this week. As RMB 330 billion of reverse repos matured during the Chinese New Year holiday and an additional RMB 120 billion of reverse repos should mature this week, the PBOC will drain a net RMB 450 billion from market. That being said, lower overnight repo rates indicated that liquidity remained ample. Technically market is under short covering as market has witnessed drop in open interest by -0.34% to settled at 9630 while prices up 0.45 rupee, now Copper is getting support at 444.2 and below same could see a test of 442 level, And resistance is now likely to be seen at 448, a move above could see prices testing 449.6.

Trading Ideas:

Copper trading range for the day is 442-449.6.

Copper ended with gains as weak data from US caused the US dollar index to weaken, lending support to prices.

Rising retail sales over time correlate with stronger economic growth, while weaker sales signal a declining economy.

The US retail sales were reported down 0.4% in January, worse than the 0.1% drop expected