Comex High Grade Copper Price Futures (HG) Technical Analysis – Bias is to Upside, but Needs Help from Weaker Dollar

Copper futures closed lower last week. The selling pressure was generated by a stronger U.S. Dollar, which tends to put pressure on demand for dollar-denominated commodities.

May Comex High Grade Copper futures settled at $3.2330, down $0.0355 or -1.09%.

This week’s price action will also be determined by trader reaction to the U.S. Dollar. The Greenback is expected to be influenced by a slew of U.S. economic data and the testimony of Fed Chair Jerome Powell.

The end of China’s Lunar New Year holiday could add to the volatility since it could lead to renewed demand for copper.

Weekly Technical Analysis

The main trend is up according to the weekly swing chart although the market has been inching sideways since the week-ending December 29.

Momentum shifted to the upside the week-ending December 16. Taking out $3.2905 will indicate the buying is getting stronger. Overcoming $3.3335 will signal a resumption of the uptrend. This could lead to a test of the June 5, 2013 main top at $3.3490.

The main range is $2.9585 to $3.3335. Its retracement zone at $3.1460 to $3.1020 is the support zone. Holding above this zone is helping to give the market an upside bias.

The short-term range is $3.0465 to $3.2905. Its 50% level or pivot at $3.1685 is also support.

Weekly Technical Forecast

Based on last week’s close at $3.2330 and the inside move. Traders should watch for volatility this week.

The trigger point for an upside breakout is likely to be $3.2905. The trigger point for a breakdown is $3.1460.

It’s a tough chart pattern to decipher so investors are going to have to watch the volume. Above average volume will be necessary to sustain any breakout or breakdown moves.