Comex High Grade Copper Futures (HG) Technical Analysis – August 23, 2016 Forecast

December Comex High Grade Copper futures continued to slide on Tuesday as investors ignored the weaker dollar, choosing instead to focus on the demand issues in China that led it to export the metal. According to the latest data, exports of unwrought copper, and copper products from China, the world’s top user of the metal, stood at 75,022 tonnes in July, a more-than-fivefold increase from the same month a year earlier.

The rising export number combined with the slowing import numbers shows that China might not be able to take too much more supply. At this time, the outlook is bearish with supply-growth stronger than demand-growth.

TECHNICAL ANALYSIS

TREND INDICATOR SWING CHART

The main trend is down according to the daily swing chart. The down trend was reaffirmed on August 22 when sellers took out the last swing bottom at $2.1455. The next main bottom comes in at $2.1265.

The new main top is $2.2000. A trade through this top will turn the main trend to up.

RETRACEMENT ZONES

The main range is $2.0315 to $2.2860. Its retracement zone is $2.1590 to $2.1290. This zone provided support last week when copper prices hit their low at $2.1455. This zone is currently being tested.

A sustained move under the 50% level at $2.1590 will indicate the selling pressure is increasing. Crossing under the Fib level at $2.1290 will put copper in a bearish position.

Overcoming the 50% level at $2.1590 will likely mean buyers have returned or sellers have exhausted the move.

GANN ANGLES

Today’s regular session begins with copper trading on the weak side of a long-term uptrending angle at $2.1615. If buyers can over take this angle then look for a possible move into the next downtrending angle at $2.1770.

A sustained move under $2.1615 will indicate increasing selling pressure. The daily chart is wide open to the downside with the next major target angle coming in at $2.0965.

WHAT TO DO TODAY

Looking at the early price action, it looks as if investors are ignoring the weaker U.S. Dollar and focusing on the fundamentals. The chart pattern indicates we should continue to see downside pressure as long as the market remains under the resistance cluster created by the main 50% level at $2.1590 and the long-term uptrending angle at $2.1615.

If selling pressure begins to grow then look for a minimum break into the main Fib at $2.1290. This is followed closely by the main bottom at $2.1265. This is another potential trigger point for a steep break. It all depends on the volume as to how fast the market gets to the next uptrending angle at $2.0965.

All bets are off on the short side if buyers regain $2.1615.