Copper breaks out on stronger Chinese data
|We have had a number of major economic news out today, overall showing weak inflationary pressures but there was good news from China. The stock markets, copper prices and yuan have all responded well to news China's economy expanded by a slightly better-than-expected margin in the first quarter of this year, thanks in part to easing concerns over the nation's trade spat with the US. As well as GDP and retail sales, it was industrial data that surprised the most, suggesting that the world's second largest economy may have bottomed:
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Industrial production +8.5% y/y vs. +5.6% expected and 5.3% last
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GDP +6.4% q/y vs. 6.3% expected and 6.4% last
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Retail sales +8.7% y/y vs. +8.3% expected and 8.2% last
In reaction to the above Chinese data, copper prices broke above a short-term corrective trend. The breakout, if sustained, could precede further technical buying given the overall bullish trend with copper holding above its 21, 50 and 200 daily moving averages and given the higher lows. The base of the breakout was around 294.50, so this level is going to be the key support to watch going forward. The first bullish objective is now this year's high at 298.50ish hit at the end of last month, with 300.00 being the subsequent target.
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