Despite Disappointing Data from China, Pro Bets on Copper

Chris Ratcliffe | Bloomberg | Getty Images

Copper futures traded lower Monday following weaker-than-expected economic data out of China.

Both industrial production and retail sales in China for the January and February period missed expectations. In addition, inflation rose in February, igniting worries of potential monetary tightening.

(Read More: Tokyo, Sydney Hit Highs; China Slips on Data)

That copper futures fell following the release of this data is significant because it suggests that copper prices are still strongly linked to China's economic picture, even as employment has picked up in the United States, albeit slightly.

The technical picture of copper shows a breakout of a consolidation pattern and suggests continued weakness down to the $3.38 objective I have for the May futures.

The global currency picture also remains favorable to lower copper prices, as the Bank of Japan and the Bank of England remain highly accommodative. Global easy money policies continue to support the U.S. dollar, and depress prices in precious and industrial metals.

(Read More: 10 Things You Need to Know to Trade Futures)

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