Copper benefitting from China reopening
Weekly Trend
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Copper has charted a series of higher troughs (HT), followed by higher peaks (HP). This puts the base metal into uptrend. Copper has found support at the 50% retracement, and may chart the next higher trough (HT?) in the series.
Copper and CHN50 Correlation
Source: www.tradingview.com
Copper's correlation started moving positively to the CHN50 around 5 Dec 2022 (green dashed vertical) and near lockdown relaxation. Since then, it has reached a correlation coefficient of +90%. This is a robust reading and, given that the base metal is a key input in production, not surprising.
In an earlier article, we highlighted the Chinese PMI beats. China's economy is rebounding steadily after relaxing its strict lockdown controls, and the increase in factory activity is at the fastest rate in over ten years.
This, and the strong correlation, suggest that copper's fate is intrinsically linked to the growth story coming out of China.
Image by Łukasz Klepaczewski from Pixabay
Russell Shor
Senior Market Strategist
Russell Shor is a Senior Market Strategist at FXCM, having been promoted to the role in 2025 in recognition of his depth of insight and consistent delivery of high-impact market analysis. He originally joined FXCM in October 2017 as a Senior Market Specialist.
Russell holds an Honours Degree in Economics from the University of South Africa, is a certified FMVA®, and a full member of the Society of Technical Analysts (UK). With over 20 years of experience in financial markets, his work is renowned for its clarity, precision, and strategic value across asset classes.
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