Commodity Trading Tips for Copper by KediaCommodity

Ajay Kumar Kedia 12 May 2014

Copper Copper settled up 0.56% at 411.70 as the euro continued to weaken as the ECB signaled interest rate cut at its next policy meeting, driving up the US dollar index. Besides, economic data from the US brightened, driving a rebound in the US stock market. LME copper prices climbed above the 60-day moving average after LME copper stocks fell to a low last seen in October 2008, and ended at USD 6,754/mt. While China’s April CPI growth on a YoY basis was reported at an 18-month low of 1.8%, and PPI fell for a 26th straight month by 2%, worse than the 1.9% decline expected. The data triggered speculation about easing monetary policy, but the PBOC remained cautious. The State Council issued opinions on further development of capital market, setting out the goals for further reforms, which boosted market confidence. Elsewhere in the US, March’s retail sales registered a 1.4% MoM rise, exceeding the 0.7% in February, while wholesale stocks also increased 1.1% in March, higher than February’s 0.5%. In the euro zone, Italy’s industrial output dropped unexpectedly by 0.5% in March, well below the 0.3% growth economists had expected. The country’s industrial output for the first quarter rose 0.1% on a quarterly basis, far below the 0.5% rise recorded in Q4 last year. UK’s industrial output fell 0.1% in March, better than the 0.2% decline forecast. Meanwhile pressure can be seen on higher side as report came from Goldman Sachs that they remains bearish on the outlook for the copper price in 2014, with a target price of $6,200/mt. Technically market is under short covering and getting support at 409.2 and below same could see a test of 406.6 level, And resistance is now likely to be seen at 413.4, a move above could see prices testing 415.