Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities
LME Copper rebounded from the lows of the week supported by a revived risk appetite.
Prices initially crashed earlier in the week amid talks that China will continue to release stocks from its reserves to cool prices.
However, after the initial crash markets recovered after China's announcement of a second sale of state reserves of commodities with the amount that was less than expected.
China will sell another 30,000 tonnes of copper, 90,000 tonnes of aluminium and 50,000 tonnes of zinc from its state reserves on July 29, the National Food and Strategic Reserves Administration said.
It was slightly less than the market expected but it should be priced in already as it's pretty well flagged.
The markets could remain range bound next week.
China authorities released stocks but were less than markets were expecting, however more stocks could be released in the coming few weeks or months which could prices subdued.
On the other, investors shrugged off recent spike in covid-19 cases but recent data has suggested that delta variant is spreading rapidly and if governments are not able to bring infections down, then we could see restrictions which will hamper growth recovery and in turn dent demand.
So, investors will be wary of the developing situation.
However, investors will await cues from the U.S. Federal reserve meeting next week.
The Fed's policy meeting next week will be followed by comments from Chair Jerome Powell which could continue to suggest that the central bank would remain accommodative despite recent spikes in inflation readings.
On the other hand, other data like durable goods orders and U.S GDP data for 2nd quarter could also drive markets.
Technically, LME Copper if sustaining above $9390-$9500 could see a Bullish momentum up to $9670-$9960 levels. Support is at $9410-$9350 levels.
On the domestic front, MCX Copper August above 733 will continue its Bullish momentum up to 742-755 levels. Support is at 732-725 levels.
Strategy: - Copper July: - Buy on dips near 733.00, Stoploss 728.00 and a Target at 745.00.
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