- Copper plunges on concerns about the strength of Chinese demand, breaks below 100-DMA at 3.024.
- Prices slumped over 5%, the worst drop in a single session since July 2015.
- Data released last week showed manufacturing activity in China declined to the lowest in five months in November.
- China is largely responsible for nearly half of global consumption of the metal, and weak Chinese manufacturing activity suggested low demand for copper.
- LME copper also came under pressure from an uptick in warehouse inventories with headline stocks rising 10,650 tonnes to 192,550 tonnes.
- The metal was trading 0.33% higher on the day at around 2.960 levels at 0845 GMT.
- Momentum studies bearish, RSI biased lower, MACD supports downside.
- We see scope for test of 200-DMA at 2.8165, bearish invalidation only on break above daily cloud.
Support levels - 2.890 (Sept 22 low), 2.865 (50% Fib retrace of 2.472 to 3.258 rally), 2.816 (200-DMA)
Resistance levels - 3.00, 3.024 (100-DMA), 3.078 (20-DMA), 3.116 (cloud top)
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