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Copper rebounds sharply on pick-up in Chinese demand

FXStreet (Mumbai) - Copper prices on Comex staged a solid comeback on Friday, reversing previous losses and resumed the recent recovery mode from fresh multi-year lows.

Copper back below 100-DMA

Currently, copper trades 3.09% higher at 2.415, retracing from fresh three-week highs posted at 2.437 in early European trades. Copper rallied this session on reports of a pick-up in Chinese demand as reflected by the declining inventories for the red metal at LME warehouse.

Nathalie Huynh, Analyst at DailyFx notes, Demand boost came as Chinese smelters piled up stocks to sell later, leading to a drawn down at exchanges. The London Metal Exchange’s inventories fell for the 9th day to the lowest since March, reversing a trend earlier this year that warehouse stocks swelled on faltering demand.

Moreover, the broad based rally across the commodity space and US dollar weakness also supports the strong rebound in copper prices.

Copper Technical Levels

The metal has an immediate resistance at 2.437 (Today’s High), a break beyond the last, the next hurdle is placed at 2.470 (Sept 18 High). Meanwhile, support stands at 2.35 below which doors could open for 2.326 levels.

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