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Comex High Grade Copper Futures (HG) Technical Analysis – February 5, 2016 Forecast

By:
James Hyerczyk
Published: Feb 5, 2016, 12:42 UTC

March Comex High Grade Copper is trading lower shortly before the regular session opening and the release of the January U.S. Non-Farm Payrolls report.

Daily March High Grade Copper

March Comex High Grade Copper is trading lower shortly before the regular session opening and the release of the January U.S. Non-Farm Payrolls report. Since copper is a dollar-denominated commodity, it could be affected by this report since the numbers will likely move the U.S. Dollar.

Traders are looking for the headline number to show the economy added 189K new jobs in January. This will be below the December reading of 292K. A lower than expected number should drive the U.S. Dollar lower. This could underpin copper prices. Massive short-covering ahead of the start of the Chinese Lunar New Year on February 8 is also helping to support prices.

Massive cuts in copper mine production this year may have put in a floor under the price of the metal, but I don’t think its driving prices higher. Traders that follow cuts in production don’t like to chase prices higher. They prefer to buy the breaks. The market won’t go up forever either since there are still major concerns about demand growth especially in China.

Daily March High Grade Copper
Daily March High Grade Copper

Technically, the main trend is up according to the daily swing chart. Look for a resumption of the uptrend on a sustained move over 2.1380. This could fuel a fast rally into the December 30 main top at 2.1485 and the major 50% level at 2.1525.

A sustained move under 2.0955 will signal the presence of sellers. This could create enough downside momentum to drive prices into a potential support cluster at 2.0670 to 2.0655.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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