March Comex High Grade Copper futures are trading higher. The catalyst behind the move is the weaker U.S. Dollar. The dollar has been weakening because of
March Comex High Grade Copper futures are trading higher. The catalyst behind the move is the weaker U.S. Dollar. The dollar has been weakening because of concerns over the timing of future interest rate hikes by the U.S. Federal Reserve. Many investors also feel that a December rate hike has been fully priced into the market. Their concern is that the Fed will move too slowly in enacting rate hikes down the road.
The pre-market rally took out yesterday’s high, making 2.0650 a new minor bottom. If the rally stalls at 2.1000 then it may retrace back into a short-term pivot at 2.0825. If the rally continues then the next upside target is a steep downtrending angle at 2.1295.
The rally doesn’t come as a surprise since the market was in the window of time for a potentially bullish closing price reversal bottom formation. In addition, technically oversold conditions also forced bearish traders to back-off from pressing the downside.
Since the main trend is down, sellers are likely to come in on the first test of the angle at 2.1295. This angle is also a trigger point for the start of an acceleration to the upside. If the buying gains traction then this market may eventually retrace all the way back to a major retracement zone at 2.2175 to 2.2535.
Watch the price action and read the order flow at today’s intraday high at 2.1000. Taking this level out could trigger a further rally into at least 2.1295. A failure at this level could lead to a pull-back into the short-term pivot at 2.0825.
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.