Copper Futures Supported by a Rising Trend line

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By :  ,  Financial Analyst

Copper Futures (Short Term): Supported by a Rising Trend line

Copper price is the economic indicator as this metal is widely used in industrial production and electrical equipment. The consumption of copper could reflect the economic situation. In fact, copper futures prices rallied more than 40% from the March low.

Currently, one of the major fundamental themes is the recovery of the economy after the outbreak of COVID-19. OECD said the global economic decline would not be as sharp as previously feared this year, though the recovery is losing pace and will need support from governments and central banks for some time yet. The OECD projected that the global economy will shrink 4.5% in 2020, less than the forecast of -6% in June.

Recently, the Chinese government announced that industrial production rose 5.6% on year in August (+5.1% expected) and retail sales grew 0.5% (flat expected). This would be a positive signal for copper as China is the largest consumer of copper.

From a technical point of view, the copper futures remain holding on the upside after breaking above the declining channel on a daily chart. In fact, the futures prices are also supported by a rising trend line drawn from March low. 

The bullish readers could set the nearest support level at $2.89, while resistance levels would be located at $3.1 and $3.3 respectively..

Source: GAIN Capital, TradingView

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