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Hugo in HTO Trading,

Copper: Holding at the 50-day moving average

Copper has fallen dramatically over the last year mostly due to global over-supply but also due to the strength of the US dollar which is the currency that is priced in.

Chinese economy continues to slow down showed by the exports reported in March which were down more than expected, tumbled 14.6%. The World Bank also lowered their growth forecast for China citing “significant” risks from global economic uncertainties. China one of the world’s largest copper consumer.

In the economic front today we will have from China, which constitute nearly half the global copper trade, the Gross Domestic Product (GDP) for the 1st Quarter, which is expected to fall from 1.5% to 1.4% and the Retail Sales which is estimated to rise from 10.7% up to 10.9%.

The commodity since the beginning of April fell more than 1.50% and is in a recovery phase, being squeezed by the 10 and the 50-day moving averages. On yesterday session copper fell but found enough support at the 50-day moving average to turn around and close near in the middle of the daily range. The Stochastic is showing an oversold market and lack of momentum.

Expecting downward move to a daily support at 260.35 on a break below previous day low at 267.50 (scenario 1) or a break above previous day high at 272.45 could throw the commodity to a daily resistance at 277.65 (scenario 2).