Key Points

• Strong demand in China
• Supply disruptions in Chile
• Technical analysis

China’s Gross Domestic Product for the third quarter of 2020 rose by 4.9% year on year, against market expectations of a 5.5% rise. The Chinese economy is displaying impressive resilience as highlighted by a stream of positive data. October Industrial production grew by 6.9% a good sign of economic activity recovery after the economic had been grappling with the negative effects of the lockdown. Both data has stimulated a bullish run metals, one of them being copper. China’s demand for copper outpaces demand from other countries and hence Copper producers get excited when the world’s second largest economy is performing well. should be benefited from the recovery of China’s economy.

The latest workers’ strike in one of Chile’s Copper mine is expected to create bottlenecks in the supply chain of copper.

Copper futures are gradually climbing in an ascending channel and have reached $3.2455 per ounce, the highest level since June 2018. All this thanks to the sustained demand in China. Bulls are now being capped-off by the upper resistance line of the channel and a price correction can’t be ruled-off for now towards the $3.2245 support handle.

A break beyond the June 2018 highs at $3.3020 region cannot be ruled out at the moment as the RSI is still bullish and yet to enter in the overbought region beyond the 68 mark. The 60 Moving Average is trailing below the price action reinforcing the upbeat bullish momentum. The 60MA is currently at $3.0550, right at the lower support line. A strong bearish correction might seek to re-test this level before further bullish continuation.

Overly the medium-term bias might flip to the downside provided that the price retreats beneath the 3.1265 initial barrier turned into support. However, a daily close above the multi-month peak of 3.2285 – 3.2815 region will cement the outlook back to positive. 

Daily Pivot Points

Name	S3	S2	S1	Pivot Point	R1	R2	R3
Copper	3.1668	3.1720	3.1791	3.1843	3.1914	3.1966	3.2037

Weekly Pivot Points

The key point to watch is the 3.3366 region which is sitting close to the June 2018 highs. A break beyond this resistance line, will open the door for the bulls to challenge the December 2013 highs. The major support on the level on the downside lies at 3.1250 close to the current classical pivot point.

Name	S3	S2	S1	Pivot Point	R1	R2	R3
Copper	3.0021	3.0493	3.1136	3.1608	3.2251	3.2723	3.3366