MCX Copper expected to trade in a range between 430.8-444.6
Commodity Online | November 09 2018
UPDATED 12:52:05 IST

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Technically market is getting support at 434.9 and below same could see a test of 430.8 levels and resistance is now likely to be seen at 441.8, a move above could see prices testing 444.6.

Copper on MCX settled down -0.79% at 439.05 with a stronger US dollar and resurfacing US-China trade tensions adding downward pressure to the complex.

Copper price comes amid continued inflows into LME warehouses. However, after a sizeable fresh cancelation of close to 10,000 tonnes in the morning means that around 50% of the LME’s 172,325 tonnes of copper is now canceled material.

Equally, a dominant warrant-holding position now holds 80-89% of LME copper stocks, while the metal’s cash/three-month spread remains in a backwardation - recently seen at $18 per tonne, but easing from $60 per tonne.

While fundamentals have been supporting copper prices, U.S.-China trade tensions have been capping gains in the metal used in power and construction. Copper hit a 4-1/2-year high in June. Last night the US dollar held on to earlier gains as the Federal Reserve kept its monetary policy on hold and indicated further gradual rate hikes.

The Fed has raised rates three times this year and is expected to hike rates again before the end of 2018.  The US Federal Reserve also voted to maintain the current benchmark interest rate.

The FOMC will keep the federal funds rate in a range of 2% to 2.25%, in line with market expectations. Now for a day ahead Key economic data to watch today include China’s CPI and PPI for October, its social financing and M2 money supply for October, the US PPI in October, as well as the University of Michigan consumer sentiment index for November.

Trading Ideas:
--Copper trading range for the day is 430.8-444.6.
--Copper slipped as the dollar extended its recovery after U.S. midterm elections and data showed copper imports by top buyer China fell in October.
--China’s Arrivals of scrap copper in September plunged 38.9 percent to 200,000 tonnes, curbed by the hefty tariffs on imports from the United States
--The global world refined copper market showed a 47,000 tonnes deficit in July, compared with a 38,000 tonnes deficit in June, the ICSG said.

Courtesy: Kedia Commodities

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