Comex High Grade Copper Futures (HG) Technical Analysis – August 31, 2016 Forecast

December Comex High Grade Copper futures are trading slightly better and above yesterday’s low as investors await the latest private sector jobs report from ADP. Due to be released at 1215 GMT, it is expected to show the private sector added 175K jobs in August.

A greater than expected number will raise the odds of a Fed rate hike in September or December, thereby making the U.S. Dollar a more attractive investment. A stronger dollar should put pressure on the dollar-denominated copper market. A weak number could trigger a short-covering rally, but gains will be limited by the bearish supply/demand fundamentals and because of Friday’s U.S. Non-Farm Payrolls report.

Technically, the main trend is down according to the daily swing chart. The market is far from turning the main trend to up, however, it is in the window of time for a potentially bullish closing price reversal bottom.

The key support angle comes in at $2.0680 today. This is the last potential support angle before the $2.0315 main bottom from June 9.

On the upside, the key area to watch is an uptrending angle at $2.1040 and a downtrending angle at $2.1100. Since the main trend is down, we could see a technical bounce on the first test of this area. However, watch for an acceleration to the upside if buyers can take out $2.1100. The next key target would be $2.1290.

Watch for volatility and an expanded range following the release of the ADP report at 1215 GMT. A stronger-than-expected number should pressure copper prices. A weak number should trigger a short-covering rally.