Copper : First resistance at 434.50-436.00
Copper posted a very late week rebound on the back of positive data from the US, but faces a major hurdle from 434.50 to 436.
• There is an argument the rebuilding of Japan will need plenty of copper, so the price should rise quickly – past 436 and on to 444-450 again. This is possible, and if a breakout above 436 is posted quickly this week a move to 444 if not 450 or so will likely follow.
• If however the market takes the view the Japan disaster will in fact result in demand destruction, then watch 415-416 as its very first support, then 410.
• Indeed a move to 405 would not surprise us – as an overreaction, but as with all metals we are a tad unsure as to how others will interpret the events over the weekend.