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Thursday, May 26, 2022

MCX Copper under short covering; Support seen at 696.7

Technically Copper market is under short covering as market has witnessed drop in open interest by 12.84% to settled at 4146 while prices up 10.55 rupees.

Now MCX Copper is getting support at 696.7 and below same could see a test of 685 levels, and resistance is now likely to be seen at 714.8, a move above could see prices testing 721.2.

Copper yesterday settled up by 1.51% at 708.35 as support seen after copper production in Chile, dropped 4.6% year-on-year in August amid falling ore grades and labor strikes at key deposits.

The Andean nation’s copper output fell to 466,928 tonnes in August, the agency said. Chile’s production through August in 2021 has fallen 1.2% to 3.77 million tonnes.Data from the Shanghai Futures Exchange showed copper inventories in top consumer China fell for the seventh straight week to their lowest since June 2009.

The People’s Bank of China injected a total CNY 100 billion of 14-day reverse repos at an interest rate of 2.35 percent on September 30th 2021, the same as in the previous day, and marking the tenth straight day of cash injections in the financial system. The central bank reinforced the moves aim to maintain liquidity in the banking system.

The moves are also seen as a sign the authorities are willing to support the financial system and avoid a big collapse and contagion due to the Evergrande crisis. Falling inventories have underpinned copper prices and helped to contain losses. In warehouses registered with the LME, on-warrant stocks were at their lowest since June at 124,200 tonnes.

Trading Ideas:
–Copper trading range for the day is 685-721.2.
–Copper prices gained as support seen after copper production in Chile, dropped 4.6% year-on-year in August.
–Falling inventories have underpinned copper prices and helped to contain losses.
–The People’s Bank of China injected a total CNY 100 billion of 14-day reverse repos at an interest rate of 2.35 percent.

Courtesy: Kedia Commodities

Source: Comodity Online

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