Breed Focus: Copper Prices Continue to Look High After Oscillation

Copper is not building a head. After a short-term oscillation, it will continue to rise. The rebound can be seen as high. It is expected that there will be oscillations on this line early this week, and this weekend will determine the direction of the market.

The recent ups and downs of London Copper and Shanghai Copper have caused the entire market to be confused. The author believes that Lun Copper is not constructing a head. After the short-term oscillation, it will continue to rise. The rebound can be seen as high.

The global economy has signs of recovery Recently, the United States announced a series of heavy-weight economic data better than expected, achieved before the industry’s “slow and steady” forecast for the U.S. economy, and investor confidence greatly increased. Among them, the employment report showed that the United States added 215,000 new jobs in February. The non-agricultural employment report showed that the number of non-agricultural employment in the United States rose by 227,000 in February, with an expected increase of 21.0 million. The number of non-agricultural employment in January was revised to an increase of 284,000, with an initial increase of 243,000. As market needs continue to increase, the United States has gradually emerged from the haze of rising unemployment. US Federal Reserve Chairman ** Bernanke also said at the end of last month that the U.S. economy is continuing to recover and that the growth rate in the next few quarters is expected to exceed that of the second half of last year. This greatly boosted the confidence of the market.

With the international rating agencies continuing to lower Greece's rating, Greece is almost in turmoil. Fortunately, the Greek government announced on Friday that the country’s 200 billion euros debt restructuring plan has been actively responded to. Finally, 85.8% of private bondholders agreed to participate in the bond swap program. The current market expects that the Greek debt reduction will be successfully completed and the second round of aid will be issued on schedule. However, this means that the European debt crisis has only been temporarily solved and has not yet been completed. The euro zone solved the debt crisis in Europe through direct assistance and continuous release of liquidity.

The domestic RRR cut is about to airborne. The National Bureau of Statistics announced on Friday that the CPI in February was up 3.2% year-on-year, and the 0.1% decline was in line with market expectations. The drop in CPI in February was mainly due to the reduction of the carryover factor. With the disappearance of the Spring Festival, the probability of falling prices of agricultural products in the next 2-3 months is greater, and the new price increase factor will also be weakened. Therefore, the domestic CPI will continue to show a downward trend in the next 2-3 months.

Credit data shows that domestic liquidity conditions are tighter than expected, and the central bank's pace of monetary policy return to normal is slow. Zhou Xiaochuan, governor of the People's Bank of China, said on Monday that the room to cut the deposit reserve ratio can be very large. The reserve requirement ratio is now at 20%, but it has been relatively low before, and in the late 1990s, the deposit reserve was The rate is only 6%. From an international point of view, the deposit reserve ratio in other countries is still at a lower level, so there is plenty of room for downward adjustment.

Inventories in London continued to decrease, and the cancellation of warehouse receipts to achieve high levels of copper stocks continued to decrease for several months, the latest data show that it has been reduced to 276,025 tons, a decrease of nearly 200,000 tons compared to last year's National Day. The cancellation of warehouse receipts reached 87,100, accounting for 31.56%, which is a very high level. This shows that the copper spot market is relatively tight, which also greatly limits the copper callback space.

The price of copper finished sideways, and it is expected that the price of Pan-Lunco copper will continue to rebound after dropping from last December 15th to 7131 US dollars. On February 9th this year, it hit a high of 8,765 US dollars and began to finish on the platform for more than a month. From the technical chart point of view, the current pressure on the February 9 high of 8765 US dollars and the February 29 high of 8695 US dollars, which is the line of 8650 US dollars. The downward support was at the link between the February 17 low of 8,131 and the March 7 low of 8,176. From the morphological point of view, there is currently no head characteristics, and there may be a small double-bottom formation. It is expected that oscillations will occur on this line early this week. This weekend, the direction of the market will be determined, and the pressure will be on the line of 8650 USD. If we can break through, the price of copper will hit a new high, and I believe that the copper price is more likely to rise after adjustment.