Chart of the day - COPPER (07.11.2022)

9:58 AM November 7, 2022

Spokesman for the Chinese health commission has reiterated China's commitment to a Covid-zero policy and vowed that the country will continue to take quick and decisive actions to tackle coronavirus outbreaks. This means that China will continue to embrace the policy of lockdowns and restrictions that are limiting economic activity in the world's second largest economy. Comments from Chinese officials come after speculations mounted that China may abandon its strict Covid policy next year. While we have not seen any major reaction to the statement on the stock markets, industrial commodities and precious metals took a hit and launched new week's trading with bearish price gaps.

Taking a look at the COPPER chart at the H4 interval, we can see that the commodity began a new week below the 8,000 level and continues to trade there after an initial attempt to launch a recovery move failed. A lot will now depend on where the price ends trading today. If the ongoing pullback is just a retest of the 8,000 price zone, another leg higher may follow with a target of 38.2% retracement of the downward move launched in mid-April (8,300 area). On the other hand, should we see a break back below 8,000 zone, bears may aim to test the upper limit of a previously broken trading range at 23.6% retracement (7,800 area).

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Source: xStation5


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