September Comex High Grade Copper is surging on Thursday with much of the move fueled by a breakout though a key technical area. Falling supply and a weaker dollar are the catalysts behind today’s rally.
Increased demand is expected to come from China. New data is also suggesting that supply is getting tight. The weaker dollar is attracting demand from foreign buyers.
Technical Analysis
The main trend is up according to the daily swing chart. Earlier today, the uptrend was reaffirmed when buyers took out the May 1 main top at $2.700. If the upside momentum continues to build then $2.700 should become support. The next major target is the March 30 main top at $2.7425.
Besides support at $2.7000, which is anticipated because of the “old top becomes new bottom” rule, support also comes in at $2.6490. This uptrending angle from the $2.5490 main bottom is moving up at a rate of $0.01 per day. This angle has also been guiding copper prices higher since June 15.
Forecast
Holding above $2.700 will indicate that investors are still willing to buy strength. For longer-term traders, look for the rally to continue as long as copper holds above the uptrending Gann angle at $2.6490.