Copper settled up 1.26% at 405.90 as support seen after market was under the influence of an extension of China’s “targeted RRR cut”.  The US economic data also proved upbeat, with both May factory output and June NAHB housing index exceeding expectations. However, investors remained cautious due to the upcoming Fed policy meeting and geopolitical crisis. The IMF said it now expects the U.S. economy to expand 2% in 2014, down from its forecast of 2.8% in April. The Federal Reserve Bank of New York reported earlier that its general business conditions index increased to 19.28 this month from 19.01 in May. A separate report showed that U.S. industrial production rose by 0.6% last month, beating forecasts for a 0.5% gain. China’s inbound shipments of the red metal amounted 380,000 tonnes in May, while between January and May imports totaled 2.17 million tonnes that is a 33.6% increase year-on-year, according to preliminary report by the General Administration of Customs. However, the upturn was short-lived as concerns over investigation into metal financing in China sent the metal to a one-month low later in the week. The probe into financing transactions may reduce demand for copper used as collateral in the months to come. Technically market is under short covering as market has witnessed drop in open interest by -16.49% to settled at 18868 while prices up 5.05 rupee, now Copper is getting support at 402.8 and below same could see a test of 399.8 level, And resistance is now likely to be seen at 408, a move above could see prices testing 410.2.

Trading Ideas:

Copper trading range for the day is 399.8-410.2.

Copper gained as support seen after market was under the influence of an extension of China’s “targeted RRR cut”.

The US economic data also proved upbeat, with both May factory output and June NAHB housing index exceeding expectations.

However, investors remained cautious due to the upcoming Fed policy meeting and geopolitical crisis.