Comex High Grade Copper Price Futures (HG) Technical Analysis – Up, Up, Up as Long as U.S. Dollar Remains Weak

December Comex High Grade Copper futures continued to make multi-year highs on Monday, backed by expectations of increased demand from China, and boosted by a weaker U.S. Dollar which is also expected to drive up foreign demand for dollar-denominated copper. A jump in gold prices also underpinned demand for the industrial metal.

Technical Analysis

The main trend is up according to the daily swing chart. Holding above the October 29, 2014 main top at $3.0625 and establishing support at this price is a strong indication that buyers are coming in to defend this level. A break back below this level will signal that the selling is greater than the buying at current price levels.

The market is up 11 days from its previous main bottom at $2.8935 so we are in the window of time for a potentially bearish closing price reversal top. The chart pattern will not mean that the trend is getting ready to turn down, but it will indicate that perhaps the rally has run out of buyers.

The hedge funds are driving up prices because they like trends and they like momentum. They also follow the Herd Theory so when one stops buying, they’ll all stop buying and when one starts selling, they’ll all start selling. This is why markets come down faster than they go up.

The nearest support is $3.0625. This is followed by the major support, an uptrending angle at $3.0010.

The daily chart also indicates the market has plenty of room to the upside since the next major targets are the August 25, 2014 main top at $3.2245 and the July 13, 2014 main top at $3.2415.

Copper could continue to catch a bid if the U.S. Dollar continues to weaken.