Comex High Grade Copper Price Futures (HG) Technical Analysis – Needs Help from Dollar Weakness to Sustain Rally Over $3.2150

A volatile trade in the U.S. Dollar helped fuel a two-sided trade in March Comex High Grade Copper futures last week. The dollar’s steep sell-off also helped make dollar-denominated copper a more attractive investment.

Copper was pressed lower early last week, but rebounded to the upside after hitting a short-term retracement area and after the U.S. Dollar reached a three-year low.

Weekly Swing Chart Analysis

The main trend is up according to the weekly swing chart. A trade through $3.3220 will signal a resumption of the uptrend. This could create the upside momentum needed to take out another main top at $3.3245. This is followed by the June 5, 2013 main top at $3.3580.

A trade though $3.1080 will indicate the selling is getting stronger.

The main range is $2.9430 to $3.3220. Its retracement zone is $3.1325 to $3.0880. Since the main trend is up, buyers came in to defend the trend on the test of this zone last week. This retracement zone is controlling the near-term direction of copper.

The short-term range is $3.3220 to $3.1080. Its 50% level or pivot is $3.2150. This level is controlling the short-term direction of the market.

Weekly Swing Chart Forecast

Based on last week’s close at $3.1990 and the price action, the direction of the copper market this week is likely to be determined by trader reaction to the short-term pivot at $3.2150.

A sustained move over $3.2150 will indicate the presence of buyers. This could create the upside momentum needed to challenge former tops at $3.3220, $3.3245 and $3.3580.

A sustained move under $3.2150 will signal the presence of sellers. This could generate the downside momentum needed to drive the market back into its main retracement zone at $3.1325 to $3.0880.