Copper prices struggled for direction last week. Prices traded in between small gains and losses amid easing worries about banking stresses and falling inventories. However, economic uncertainty has kept upside momentum.
Top metals consumer China Purchasing managers’ index data, released on Friday, showed that Chinese service sector activity grew at its fastest pace in 12 years in March, manufacturing activity slowed from the prior month, pointing to an uneven recovery in Asia’s largest economy and a major export market for European companies.
Further, the pound rose 0.58% against the dollar, putting it on pace for a nearly 3% gain for March, its strongest monthly performance since November, as headline inflation in Britain showed no signs of slowing down. A strong pound also supported metals prices last week.
Data showed the U.K. economy avoided recession last year, growing a revised 0.1% on the quarter in the final three months of last year, slightly better than the flat figure earlier recorded.
Moreover, Euro zone inflation data show that annual CPI grew 6.9% in March, a reduction from the 8.5% growth the prior month. While, German inflation data helped lift the common currency and as concerns over the banking sector receded.
Technical View
Copper prices struggled in between gains and losses last week. After hitting a low of 769.05, prices recovered to the weekly high 784.35 and settled at 779.5.
Cluster of indecisive candle sticks on the daily chat is indicating a directionless trend. However, prices are still trading above its crucial support of 765.00, which is creating probability for upside momentum in the near future. Adding to this, prices are trading above 50 SMA.
Hence, it’s expected that any dip towards 770-772 will attract near future buying activities. Projected target will be 778-786. Stop loss will be below 765.00.
On the downside, crucial support is seen at 762.50 and breaks below it only. Prices may retreat towards 755-748.00.