Copper: Price Rally Erased After Overnight Sell-Off
Hugo O'Neill | Mar 11, 2015 05:19AM ET
Copper sold off in the overnight session as the U.S dollar rose to 12-year highs as the euro fell below 1.07 for the first time in 8 years on the beginning of bond buying program in the Euro Zone. The dollar index is a key bearish factor in commodity prices, including copper.
Chinese monetary stimulus aside, the fundamentals in China which constitute nearly half the global copper trade, also appear to be fading. Yesterday market sentiment was hit by China week producer price index (PPI) in February falling -4.8% in February. Changes in the PPI are widely considered as an indicator of commodity inflation.
The commodity since the star of March fell 2.55% and is in a recovery phase trading below the 10-day moving average. On yesterday session copper fell erasing Mondays rally and close near the low of the day, making an inside day.
Expecting downward move to a daily key level at 252.55 on a break below previous day low at 260.50 (scenario 1) or a break above previous day high at 266.85 could throw the commodity to a daily resistance at 277.65.
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