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Copper: Outside day below a resistance zone

In the beginning of April copper prices fell, as Chinese economy slowed down to 7.4% last year, the slowest in 24 years and projections to go down below 7.0% this year. But a surprisingly weak US jobs report in March also added concerns over the outlook for economic growth after other recent economic data pointed to a slowdown at the start of this year.

In the economic front this week we will have from China, which constitute nearly half the global copper trade, the consumer price index (CPI) in March, with a previous number of 1.4% and the producer price index with a previous number of -4.8%.

The commodity in March rose 1.50% and is in a recovery phase trading below the 10-day moving average. On yesterday session copper initially rose but found enough selling pressure at a daily resistance zone to turn around and close near the low of the day, making an outside day. The Stochastic is showing bearish momentum.

Expecting downward move to a daily support at 260.35 on a break below previous day low at 269.25 (scenario 1).