Comex High Grade Copper Futures Technical Analysis – August 23, 2013 Forecast

Improvements in Chinese manufacturing and the Euro Zone economy helped trigger a surge in September High Grade Copper on Thursday. The move however stopped short of the recent top at 3.3835, triggering a late session retracement. The market nonetheless remains in a position to challenge the top.

Technically, a new minor bottom was formed at 3.2925. A trade through this price will turn the main trend to down and could trigger a break into a retracement zone at 3.2185 to 3.1796. The first Gann angle resistance is 3.3710, followed by 3.3773. 

Despite the potential bullishness caused by the news from China earlier in the week, traders are still a little worried about when and by how much the Fed will begin tapering its monetary stimulus. As long as this worry is out there, investors may be hesitant about buying strength.

Today is an important day because Thursday’s sell-off as the market neared 3.3835 could have been a sign that the selling is greater than the buying at current price levels. A full recovery today will negate that thought and signal the presence of buyers. A sell-off today and a break through 3.2925 will be a bearish sign and could trigger an acceleration to the downside.