Comex High Grade Copper Price Futures (HG) Technical Analysis – Trade Through $3.0225 Could Trigger Steep Break

December Comex High Grade Copper futures were under pressure most of the week by a stronger U.S. Dollar and by concerns that the rally in October had become overextended.

Traders are saying that the rally in October was likely an overreaction to the story about improving demand in China. This led to over-speculation as investors shied away from buying strength. Actual demand indicators look relatively poor for copper and the supply side isn’t particularly tight. This could mean the market is setting up for a rollover to the downside.

Weekly Technical Analysis

The main trend is up according to the weekly swing chart. However, the momentum the past two weeks has been drifting sideways to lower.

A trade through $3.2595 will signal a resumption of the uptrend. The main trend will turn to down on the weekly chart on a move through $2.8940.

The short-term range is $2.8940 to $3.2595. Its 50% level or pivot at $3.0770 is acting like support.

The main support is a long-term retracement zone at $3.0230 to $2.8250.

Weekly Technical Forecast

Based on last week’s close at $3.1175 and the price action, the direction of the copper market this week is likely to be determined by trader reaction to the 50% level at $3.0770.

A sustained move over $3.0770 will signal the presence of buyers. This could create enough upside momentum to challenge an uptrending angle at $3.1740.

Crossing to the strong side of the angle at $3.1740 will indicate the buying is getting stronger. This could trigger a surge into $3.2595. Taking out this level will signal a resumption of the uptrend with $3.4185 the next likely target.

A sustained move under $3.0770 will indicate the presence of sellers. This could trigger a break into a cluster of numbers at $3.0340, $3.0230 and $3.0225. Since the trend is up, we could see a technical bounce on the first test of the cluster.

Taking out $3.0225 will put the copper market in a weak position. This could encourage even more selling with the next target the main bottom at $2.8940.

A stronger U.S. Dollar is likely to drive prices lower this week.