Comex High Grade Copper Price Futures (HG) Technical Analysis – Speculators Will Be Influenced by the U.S. Dollar

September Comex High Grade Copper futures settled higher and inside Friday’s range, suggesting investor indecision and impending volatility. The market continued to be propped up by a weaker U.S. Dollar which made the industrial metal more attractive to foreign buyers. Also supporting the market was concerns over mine disruptions which fueled concerns about lower supply.

In other news, hedge funds and money managers increased their net long positions in copper by 7,706 contracts to 74,233 contracts, the highest since February.

Technically, the main trend is up according to the daily swing chart, but the market is having trouble with the March 31 main top at $2.4725. The daily chart indicates that if buyers can sustain a move over this level, there is plenty of room to run to the upside with $2.8495 the next major upside target.

A sustained move under this level will not mean the trend is getting ready to turn lower, but it will indicate the selling is getting stronger, or that the buying is getting weaker. The buying and selling is also likely to be controlled by the direction of the U.S. Dollar. A weaker dollar could trigger a surge to the upside if it leads to increased foreign demand. The Fed’s interest rate decision on Wednesday and its monetary policy statement will influence the dollar and consequently copper prices.

Copper is also walking up a key uptrending angle from the $2.6310 main bottom. It is moving up at a rate of $0.01 per day. Monday’s close over the angle at $2.7310 indicates an upside bias and the presence of buyers. Look for this upside bias to continue as long as copper remains over this angle.

A failure to hold the angle will signal the presence of sellers. This will open up the copper market to further selling pressure with $2.6910 to $2.6765 the next likely target.

We’re looking for a potential breakout over $2.7505 as long as the strikes continue, China’s economy continues to improve and the U.S. Dollar continues to weaken.