Fundamental Analysis
Copper failed to trader higher this morning despite the increase in the optimism that Chinese economic growth is improving. The data released during the Asian training session showed that the Chinese HSBC manufacturing PMI for October came in at a much better level than expected and also it polished the seven month high.
The metal is also facing some challenges as the ECB is planning to undertake risk assessment on major Eurozone’s bank during the coming year which is denting the demand. Although, these tests have been due for a long time, but the question which is imperative for us, is the credibility of the ECB bank, given that the bank has already done two worthless stress test in the recent years.
Therefore, investors will be looking at the result of these stress test very carefully because, if the trouble banks do not show any major holes, then this will make this exercise once again insignificant, but on the other hand, if we do see major fleabags in their balance sheets- and given the recent rise in the stream of non-performing loans; could certainly impact the growth in the medium term for these banks.
Technical Analysis
Copper fell near from its resistance zone of $3.36 as we predicted and the price is finding its support from its upward trend line. As long as the support zone of $3.21 holds, we are expecting pretty much range bound trading copper. However, if the commodity does break its support than we could target the next support at $3.18.
Disclosure & Disclaimer: The above is for informational purposes only and NOT to be construed as specific trading advice. responsibility for trade decisions is solely with the reader.
by Naeem Aslam
Copper failed to trader higher this morning despite the increase in the optimism that Chinese economic growth is improving. The data released during the Asian training session showed that the Chinese HSBC manufacturing PMI for October came in at a much better level than expected and also it polished the seven month high.
The metal is also facing some challenges as the ECB is planning to undertake risk assessment on major Eurozone’s bank during the coming year which is denting the demand. Although, these tests have been due for a long time, but the question which is imperative for us, is the credibility of the ECB bank, given that the bank has already done two worthless stress test in the recent years.
Therefore, investors will be looking at the result of these stress test very carefully because, if the trouble banks do not show any major holes, then this will make this exercise once again insignificant, but on the other hand, if we do see major fleabags in their balance sheets- and given the recent rise in the stream of non-performing loans; could certainly impact the growth in the medium term for these banks.
Technical Analysis
Copper fell near from its resistance zone of $3.36 as we predicted and the price is finding its support from its upward trend line. As long as the support zone of $3.21 holds, we are expecting pretty much range bound trading copper. However, if the commodity does break its support than we could target the next support at $3.18.
Disclosure & Disclaimer: The above is for informational purposes only and NOT to be construed as specific trading advice. responsibility for trade decisions is solely with the reader.
by Naeem Aslam