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Copper: Potential double bottom pattern

Yesterday, copper recovered from a multi-year low, with investors relinquishing worries over the Greek election result while speculation grew that China’s State Reserve Bureau (SRB) was looking to buy copper on the cheap in a rerun of its actions towards the end of last year, when prices of the metal slid.

This week on the economic calendar we have from China, the world’s biggest copper consumer, the CB Leading Economic Index in December with a previous number of 0.9.

On yesterday session copper initially fell making a new low at 241.85 but found enough buying pressure to rally back up and close near the high of the day. The commodity fell 9.25% since the start of year but a potential double bottom pattern seems to be in the making. A close above the 10-day moving average will be a good bullish signal.

Expecting upward move to a key level at 277.65 on a break above a daily support zone at 260.35 (scenario 1).