Copper settled up 1.28% at 400.85 recovered on Friday, as buying picked up a day after prices hit their lowest in 1-1/2 months, but the metal still fell for a third straight week due to concerns over demand and a probe into metals financing in China. News lastweek that authorities are investigating the use of cargoes of metal as collateral in financing deals in China has raised fears about trade in the metal. Concerns over fraudulent financing at some depots in Qingdao port has prompted some banks and merchants to cut credit for financing deals or relocate metal to better-known warehousing firms, including those that are part of the LME's vast system. Meanwhile Bank of America Merrill Lynch reported that they will maintain an average second-quarter copper forecast of $6,500 a metric ton, suggesting some downside from current levels. According to the Bank, issues surrounding Chinese copper stocks in Qingdao are unlikely to break the copper market. Much copper is held for financing deals, and worries about irregularities have causes some apprehension this month. Chinese authorities are reportedly investigating financial deals to see if some they were backed by copper that did not exist, the bank explains. Also Investors are likely to monitor economic data from China closely to gauge the health of the world's top copper consumer as the economy has had a soft start to the year. The Chinese economy showed some signs of stabilising in May as the government unveiled more stimulus measures, but signs of further deterioration in the property market indicate more policy support may be needed.  Technically market is under short covering and getting support at 397.6 and below same could see a test of 394.2 level, And resistance is now likely to be seen at 403.3, a move above could see prices testing 405.6.

Trading Ideas:

Copper trading range for the day is 394.2-405.6.

Copper prices recovered as buying picked up a day after prices dropped due to concerns over demand and a probe into metals financing in China.

News that authorities are investigating the use of cargoes of metal as collateral in financing deals in China has raised fears about trade in the metal.

Investors are likely to monitor economic data from China closely to gauge the health of the economy has had a soft start to the year.