The decline of copper is another symptom of the wave of deflation we’re seeing in prices.
Today on the economic calendar we have from China, the world’s biggest copper consumer, the GDP year-over-year of the 3rd quarter that is expected to fall from 7.5% to 7.2% showing a shrinking economy. Also the Chinese retail sales is estimated to fall from 11.9% to 11.8% reflecting the degree of diminishing economic prosperity.
Copper initially tried to break above 300.80 level a daily resistance but found enough resistance to push the commodity back down and closing at mid-range of the day, below the 10-day moving average. The commodity is in a bearish phase since the end of September.
Stochastic is setting higher lows and price is making lower lows (bullish divergence), signs that the downside may begin to get exhausted.
Expecting upward move to a key level at 307.60 on a break above previous day high at 301.65 (scenario 1) or a break below previous day low at 296.65 could push copper prices to Year low at 290.73 (scenario 2).