The Chinese central bank made its second-rate cut in three months and will not be enough to halt a downturn in the world’s second largest economy, with more easing steps needed, say economists.
Monetary stimulus aside, the fundamentals in China which constitute nearly half the global copper trade, also appear to be improving.
Last week market sentiment was hit by China strong preliminary HSBC Manufacturing PMI rising 50.1 in February. The data is an early indicator of economic health in the Chinese manufacturing sector.
On yesterday session copper did not move much, making the second narrow range day and close near the open of the day. The commodity rose 7.91% in February and is in a confirmed recovery phase. The stochastic in showing a overbought market but even with the commodity well into overbought territory, we should not fight the strong upward trend.
Expecting upward move to a daily resistance at 277.65 on a break above previous day high at 271.50 (scenario 1).