After breaching support 763.50, Copper prices retreated towards 750. Hit both predicted levels 758.50- 755, as expected on March 2, 2023.
Copper prices retreated sharply as major importer China set a weaker-than-expected GDP target for 2023, undermining expectations of a strong recovery in demand.
A prospect of slowing economic growth weighed heavily on copper prices, adding to pressure from a soft GDP target from China. Chinese government officials over the weekend forecast that the economy would expand by 5% in 2023, after a 3% rise in 2022.
Copper futures sank 0.86% to749.55.
Analysts at ING called the Chinese forecast “softer-than-expected”, stating that the government likely recognized that external demand for Chinese exports was weakening, which would in turn dent local activity.
The forecast also ramped up fears that a recovery in China will not be as robust as initially thought, even as the country relaxed most anti-COVID measures earlier this year.
But business activity in the world’s second-largest economy surged to pre-COVID levels in February, data showed last week. The reading had triggered strong gains in copper, which the red metal now appears to have largely reversed.
Focus this week is on a testimony by Fed Chair Jerome Powell, China trade balance and CPI data on Thursday.
Technical – 745 will act as a decisive support
Copper prices retreated from the peak of 775.50 (March 2, 2023), and trading at 750.20 levels
After breaching support 763.50, Copper prices retreated towards 750. Hit both predicted levels 758- 755, as expected.
Formation of three black crows candlestick on the daily chart is still indicating a bearish momentum in copper prices. And it may test the next support 745.50 very soon.
Further, 745 will act as a decisive support; if prices break it extends the falling stick towards 741.20. Alternatively, failure of the break below 745 will create a probability for a pullback. And copper prices may retest 758.50-762.50 its immediate resistance.