Copper settled 0.57% up at 429.65 trading at a one-week high as a sharp deterioration in Chinese manufacturing activity fuelled hopes that policymakers Beijing will act to support growth in the world’s second largest economy. Growing speculation policymakers in the US and Europe will implement fresh stimulus measures to boost growth in their respective economies further supported gains. The disappointing data added to ongoing speculation policymakers in Beijing will cut banks’ RR rates again after inflation cooled to a 30-month low in July. The PBoC has lowered both twice so far this year in an effort to boost lending and stimulate growth. Market sentiment remained supported after Fed indicated that the US central bank could implement fresh stimulus measures to strengthen the US economic recovery. Speaking at the Fed’s annual symposium, Bernanke said the persistently high rate of unemployment was a “grave concern” and reiterated that the central bank was ready to provide additional policy accommodation as needed to shore up growth. For today's session market is looking to take support at 428, a break below could see a test of 426.3 and where as resistance is now likely to be seen at 431.1, a move above could see prices testing 432.5.

Trading Ideas:

Copper trading range for the day is 426.3-432.5.

Copper ended with gains on stimulus prospects after gloomy China data

China's HSBC Purchasing Managers' Index fell to a seasonally adjusted 47.6, its lowest level since March 2009.

Purchases of short term sovereign bonds by the European Central bank would not breach European Union rules