Comex High Grade Copper Price Futures (HG) Technical Analysis – Supported by Weaker Dollar, China Growth Expectations

September Comex High Grade Copper futures closed higher on Wednesday but remained inside Tuesday’s range. This suggests investor indecision and impending volatility. Traders may have also stayed on the sidelines today due to concerns over the Fed and on the notion that yesterday’s rally may have been overdone.

Copper is hovering near a two-year high in reaction to a weaker dollar which is making the industrial metal more attractive to foreign buyers. Tight supply forecasts are also helping to boost prices. Traders are also saying that solid Chinese economic growth and curbs on scrap imports to China could boost demand for refined copper in the world’s largest metals consumer.

Some traders are being cautious about the upside potential of the market. Today’s inability to follow-through to the upside may have been a sign of profit-taking also after yesterday’s huge gains.

Technical Analysis

The main trend is up according to the daily swing chart. A trade through $2.7505 will signal a resumption of the uptrend. The daily chart indicates there is plenty of room to the upside with $2.8495 the next major upside target.

The fundamentals aren’t strong enough at this time to trigger a fast move into the upside target, however. What it indicates is that if the rally fails, it won’t be because of resistance, but because buyers pulled their bids.

The key support angle is at $2.7310. This angle, moving up at a rate of .01 per day from the $2.6310 main bottom on July 10, has to hold as support, or prices may collapse into $2.6910 to $2.6765.