Copper (COPPER) quotations are trading down more than 1.5% today and have slipped below the psychological $8,000 barrier. Copper is increasingly plunging as investors no longer see such good prospects for economic recovery in China this year. Incoming data from the Middle Kingdom indicate that the country's consumption recovery is deceptive for the moment, which, combined with the fact that China accounts for almost half of global demand for the commodity, creates a mix that spoils sentiment on the metal.
In this regard, it is also worth noting the role of the government. Beijing has not planned much spending on infrastructure and real estate recently, which naturally reduces demand for the commodity. Moreover, a great deal of uncertainty is provided by today's rumors of possible debt problems in China, highlighted by the very late repayment of debts by Kunming Dianchi, which is owned by the government and is a local corporate entity in Yunnan province, of which Kunming is the capital.
It is also worth bearing in mind the problems of the global economy and the lingering specter of recession, which for the moment seems to be supporting the supply side.
Chart of COPPER quotations on the D1 interval. Copper prices are currently falling below the psychological barrier of $8,000 and breaking out below the 200-day exponential moving average (golden curve), which at the moment is the main control point defining further movements on the instrument. The next support level is the 50% Fibo retracement of the wave initiated in February 2020. Local resistance is the previously mentioned USD 8000 level and the 200-EMA. Source: xStation5
