Copper prices dropped significantly and reached its lowest in more than a week. Prices saw pressure as a strong dollar made metals expensive to buyers using other currencies. Further, Chinese trade data released earlier in the morning disappointed the world’s largest copper importer.
Copper futures fell 1.14% to $3.7430 a pound- a two-week low. MCX copper dropped by 0.96% at 726.50.
Chinese data showed that while imports and exports shrank at a slower-than-expected pace in August, they still remained close to historic lows. China’s copper imports also dropped about 5% from last year, indicating sluggish appetite for the red metal amid deteriorating economic conditions.
China’s copper imports have slowed in recent months as the country grapples with a manufacturing slowdown, as well as a severe cash crunch in its massive property market.
Technical Outlook
Copper prices dropped by 0.89% and traded at 727.00 levels today. Prices gave up more than 1.80% since the start of the week.
On the above chart, recent prices action resulted in formation of a long bearish candlestick which is indicating a weakness in the near future. However, prices would need to break its next support 723.50 in order to extend fall. Below it may test 718.50.
Alternatively, prices may find support from 724.50-724.00 and once again test 730-734.50 its immediate resistance.