The decline in copper prices over the last year was mainly due to concerns over copper demand from China, due to recent signs of economic sluggishness.
Last week the Chinese manufacturing data tumbled to a 15-month low in July, throwing a cloud over growth in the world’s second-largest economy, accounting for nearly 40% of the world’s demand for copper. That also hit prices of many commodities which are used in manufacturing.
The commodity since the beginning of the year fell more than 15.0% and is in a strong bearish phase, closing below year low. Last week copper plunged with a wide range and close near the low of the week on average volume. The Stochastic is showing an oversold market but even with the commodity well into oversold territory, we should not fight the strong downward trend just yet.
Expecting a downward move to a Fibonacci extension at 209.19 on a break below previous week low at 235.05 (scenario 1).