Copper prices retreated slightly on Tuesday. Prices drop from the day’s high on worries about the impact of a U.S. banking crisis. Meanwhile, a volatile dollar and a slow recovery of demand in top metals consumer China also weighed on sentiment.
MCX copper futures settled at 758.40, down by 0.43%. Prices retreated from the day’s high 762.00
On the other hand, LME copper has given up about 7% since touching a seven-month peak of $9,550.50 a tonne in January, mainly on concern over demand in China and climbing global interest rates.
The U.S. banking sector brewed increased concerns over a potential economic crisis which continued pressuring commodity prices. A stronger dollar makes commodities priced in the U.S. currency more expensive for buyers using other currencies.
The dollar edged higher on Tuesday as traders set aside a fairly strong reading of consumer price data and tried to gauge whether the U.S. Federal Reserve will raise interest rates next week after the collapse of two banks sparked widespread market unease.
Uncertainty about the pace of recovery of metals demand in China was also undermining prices.
Analysts expect Chinese copper demand to improve in late March or from the second quarter after the easing of COVID-19 restriction
Technical View
Copper prices retreated from the day’s high 762 and settled at 758.40. Since 7 March 2023 prices have been struggling to cross immediate resistance at 765.50.
On the daily chart, the Cluster of indecisive candlestick is indicating an indecisiveness in near future. However, Prices still trading below their 50 SMA which is creating probability for bearishness in the near future.
Hence, any rise towards 761.50-762 is expected to attract near future selling activities. Downside’s target would be 748-745.50.
On the upside, massive resistance is seen at 765.90 on a closing basis. A break above only will open the door for 770-775.00