Copper prices continue the downside streal after the Manufacturing PMI and Caixin Manufacturing PMI data out of China both fell short of estimates.
Manufacturing PMI data from the CLFP registered at 51.3, which was short of the market estimate of 51.5 and the previous number of 51.9. The same data from Markit showed a reading of 51.5, which did not meet the market expectation of 52.6. It also fell short of the 53.0 reading of the previous month.
These data indicate that demand growth for copper from China may slow, affecting prices. Copper price is currently trading 0.34% lower. Prices have fallen nearly 5% after peaking at 3.7340 on 8 January.
Copper price remains on the downward trend following the downbeat PMI numbers from China. This situation allows copper price to continue the downside move following the breakdown of the triangle. More selling momentum is needed to allow copper price to test the 3.4895 support level. Below this area, we could see copper price aiming for 3.3925, in the short term.
On the other hand, recovery in copper price will allow for a test of the 3.5755 resistance, with 3.6530 serving as an additional resistance target. A further advance may allow for a retest of Nov 2011 highs at 3.7345.
