Copper yesterday traded with the positive node and settled 0.16% up at 423.15 mostly rallied nearly 12% since the beginning of 2012, buoyed by expectations that demand from top consumer China will remain strong and that the global economy was recovering despite the effects of the euro zone’s debt crisis. This week support seen as appetite for riskier assets was boosted by the Federal Reserve’s pledge to keep rates at historically low levels until at least late-2014. At the conclusion of Wednesday’s policy-setting meeting, the FOMC said in a statement that economic conditions “are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.” The new commitment replaces the statement that economic conditions were likely to stay at the historic low range of 0% to 0.25% until at least mid-2013. Low interest rates can make holding copper and other commodities more appealing compared with interest-bearing assets. At his press conference following the decision, Fed Chairman said that policy makers were “prepared to provide further monetary accommodation” and added that bond buying is “an option that’s certainly on the table.” The comments fuelled speculation that the central bank may embark on a third round of quantitative easing, sending the U. S. dollar lower against its major counterparts. For today's session market is looking to take support at 419.6, a break below could see a test of 416.1 and where as resistance is now likely to be seen at 425.9, a move above could see prices testing 428.6.

Trading Ideas:

Copper trading range is 416.1-428.6.

Copper rallied as appetite for riskier assets was boosted by the Fed’s pledge to keep rates at low levels until 2014.

Low interest rates can make holding copper and other commodities more appealing compared with interest-bearing assets.

Copper rallied nearly 12% since the beginning of 2012, buoyed by expectations that demand from top consumer China will remain strong.