Comex High Grade Copper Price Futures (HG) Technical Analysis – May Be Headed to $3.0930 to $3.0535 Value Zone

December Comex High Grade Copper futures surged to a one-week high on Tuesday before running into resistance. The industrial metal was supported by a weaker U.S. Dollar, which made it more attractive to foreign buyers and optimism over global growth prospects.

The rally fell short of the previous high, suggesting investors are being a little cautious about buying strength. Some analysts believe the prevailing sentiment in copper is bullish based on expectations of global growth, but that gains may be limited because of lofty prices. Some are also anticipating an oversupplied copper market next year partly driven by increased mine production after a series of strikes this year and a slowdown in China due to restrictions on property and infrastructure.

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, the market has been trading sideways since October 16.

A trade through $3.2595 will signal a resumption of the uptrend. This could trigger a further rally into the December 26, 2013 main top at $3.2930.

On Tuesday, the market ran into additional resistance provided by a pair of three-year tops at $3.2245 and $3.2415.

A sustained move under $3.2245 will indicate the presence of sellers. This could trigger enough downside momentum to test a low at $3.1380.

The main range is $2.9260 to $3.2595. If the selling gains traction under $3.1380 then we could see a test of its retracement zone at $3.0930 to $3.0535.