Comex High Grade Copper Futures (HG) Technical Analysis – August 25, 2016 Forecast

Sellers hit December Comex Copper futures early in the session, taking out yesterday’s low and driving the market into its lowest level since June 17. The catalyst behind the move was concern over mounting supply. Volume was low, however, ahead of a key meeting of central bankers and a speech by Fed Chair Janet Yellen on Friday.

Traders were also watching the movement of the U.S. Dollar since its value will have a direct influence on demand for dollar-denominated copper. Hawkish comments from Yellen on Friday should increase U.S. interest rates which will make the dollar a more attractive investment and likely lead to a drop in demand for copper.

Technically, the main trend is down according to the daily swing chart. The main trend will turn up on a trade through $2.2000. On Monday, the market will enter the window of time for a potentially bullish closing price reversal bottom chart pattern. So we have to expect at least two more days of selling pressure.

The main range is $2.0315 to $2.2860. Its retracement zone is $2.1590 to $2.1290. Trading on the weak side of this retracement zone makes it resistance while putting the market in a bearish position.

Based on the current price, the key angles to watch on the upside come in at $2.0990 to $2.1000. Since the trend is down, sellers may come in to defend this area. If buyers can take it out then look for a possible rally back into the main retracement zone over the near-term.

A sustained move under $2.0990 will indicate increasing selling pressure. This should lead to an eventual test of the long-term uptrending angle, currently at $2.0655. This is the last potential support angle before the $2.0315 main bottom.