Comex High Grade Copper Futures (HG) Technical Analysis – February 9, 2016 Forecast

March Comex High Grade Copper futures broke sharply earlier in the session. The move was probably caused by the low volume or the lack of participation by Chinese traders. Yesterday was the start of the weeklong Chinese New Year.

Recently, the market rallied because of short-covering ahead the holiday and on optimism over production cuts. However, the current price action suggests there are still concerns over the supply glut. Furthermore, buyers aren’t sure about the direction of the U.S. Dollar. A weaker dollar tends to underpin copper prices. A stronger dollar tends to be bearish for copper prices.

The main trend is up according to the daily swing chart. However, momentum has shifted to the downside.

The main range is 1.9355 to 2.1380. Its retracement zone at 2.0370 to 2.0130 is the primary downside target. Since the main trend is up, buyers may come in on a test of this zone so be prepared for a technical bounce.

The next potential support target under the retracement zone is an uptrending angle at 2.0105. This essentially forms a support cluster with the Fibonacci level.

The nearest upside target is a steep downtrending angle at 2.0780. If the weakness is going to continue then sellers are likely to come in on a test of this angle. If there is breakout over this angle then buyers will likely go after the next downtrending angle at 2.1080.

There is no key pivot price today, but traders should watch for a technical bounce on the first test of the 50% level at 2.0370.