Copper settled up 0.8% at 451.20 as support from a strong euro helped cushion concerns about short-term demand in China after its central bank moved to tighten the money supply. The People's Bank of China (PBOC) issued cash-draining forward bond repurchase agreements on Tuesday, sucking $7.9 billion out of the system, pushing up the cost of money after unexpectedly strong credit growth in January. China is the biggest consumer of copper, which is used in construction and power cables. It imported record volumes of copper last month, partly for consumption and partly to ease tight credit conditions. Goldman Sachs sees Chinese bonded inventories at 700,000 tonnes, up from 550,000 tonnes since the beginning of the year, it said in a note. The euro hit a seven-week high against the dollar, which was trading at a six-week low against a basket of currencies. In the week ahead, the focus will be on the U.S. Federal Reserve's tapering of monetary stimulus, with the release of its minutes on Wednesday, and on China's slowdown, with a purchasing managers' index due on Thursday. Both factors have been behind this year's sell-off in emerging markets. U.S. manufacturing last week recorded its biggest drop in more than 4-1/2 years in January as cold weather disrupted production. It was the latest indication that the world's biggest economy got off to a weak start this year. Technically market is under short covering as market has witnessed drop in open interest by -9.31% to settled at 9332 while prices up 3.6 rupee, now Copper is getting support at 448.1 and below same could see a test of 445.1 level, And resistance is now likely to be seen at 452.8, a move above could see prices testing 454.5.

Trading Ideas:

Copper trading range for the day is 445.1-454.5.

Copper ended with gains boosted by signs of improving access to credit in China

The People’s Bank of China sold repurchase contracts for the first time since June after data showed record new credit was extended.

Copper daily stocks at Shanghai exchange came up by 1673 tonnes