Copper prices are trending higher today as markets continue to respond to the growth of China’s GDP, despite its coming in lower than expected. China’s economy grew by 4.9% in the 3rd quarter, which exceeded the 3.2% growth of the 2nd quarter but fell short of estimates of 5.2%.
In the face of a continuation of China’s stimulus programs, industrial production in China and utilization of copper is expected to keep expanding. This is the reason expert panellists at a recent virtual event hosted by the London Metals Exchange (LME) tipped copper as the base metal to look out for in 2021.
The Team Head of FICC Technical Analysis at Commerzbank, Karen Jones, believes that LME copper price will still head towards September highs. She also believes that there is a market scope for the December 2017 and June 2018 highs to be attained.
Copper price is now testing the 3.1255 resistance, after the bounce from the neckline of the inverse head and shoulders led to an advance from 3.0275. A break of this area allows copper price to target the 3.1865 price level, which matches the measured move that completes the projected price move from the pattern.
On the other hand, a rejection at 3.1255 may allow for a pullback towards the 3.0920 support. 3.0275 comes in close as the next target to the south. Only a breakdown of the neckline will invalidate the pattern, which clears the way for price to aim for the 3.0010 and 2.9795 support levels.
