Copper continues to extend Friday’s reversal to the upside following an over 4% gain in Chinese equity markets in the overnight. This comes amid lower industrial production readings, as well as, a slowdown in Chinese GDP in the third quarter to 6.5%, down from 6.7% in the second quarter. Demand for copper is expected to increase as Chinese officials have expressed support for measures that will enhance growth and liquidity. A proposal for increased infrastructure spending as well as tax cuts on personal income were released over the weekend with the possibility of total tax cuts extending to about 1% of GDP. Copper has been consolidating and fairly range bound since mid-September with the near-term reversal action from last week supporting a move higher, and the next upside target seen around the 100 day moving average at 2.8430. Support comes in around the 50 day moving average of 2.7276.
Copper Dec ’18 Daily Chart