Comex High Grade Copper Futures (HG) Technical Analysis – November 6, 2015 Forecast

December Comex Copper futures closed sharply lower on Thursday, reaffirming the downtrend and putting the market in a position to test the September 29 main bottom at 2.2255. The short-sellers are clearly in control with long-term investors being rattled by the stronger U.S. Dollar and concerns about a drop in demand from China.

The heavy selling pressure on November 5 and the close near the low also suggests that traders are betting heavily on a bullish U.S. Non-Farm Payrolls report later today. Traders expect the report to say the economy added 179K new jobs, but the number most will be keying on is the average hourly wages. This is estimated to be an increase of 0.2%, which means 2.2% annual growth.

Look for a steep break if the headline number and the average hourly wages figure beat the estimate. We could see a sideways move if the numbers come out mixed. There is likely to be a short-covering rally if both numbers miss the estimates.

Based on the close at 2.2550, the key number to watch is a long-term uptrending angle at 2.2605.

A bullish tone could develop on a sustained move over 2.2605 with the upside targets coming in at 2.1555 and 2.2820.

A sustained move under 2.2605 will signal the presence of sellers. The first target is the September 29 bottom at 2.2255. The daily chart is wide open under this bottom with the April 28 bottom at 2.1740 the next major target.

Watch and read the price action and order flow at 2.2605. Trader reaction to this figure will tell us whether the bulls or the bears are in control. Look for the move to be determined by the jobs report, due to be released at 8:30 a.m. ET. Better-than-average volatility and volume should also be expected.