Comex High Grade Copper Price Futures (HG) Technical Analysis – Turns Extremely Bullish Over $3.1425

December Comex High Grade Copper futures posted a new high for the week, rallying to its highest level in three years on Tuesday. The move was fueled by a drop in inventories in London and Shanghai. Weakness in the U.S. Dollar after North Korea raised geopolitical tensions by launching a missile that flew over northern Japan also helped boost dollar-denominated copper.

Inventories in warehouses registered by both the London and Shanghai exchanges showed declines. Weekly copper stocks in warehouses registered by the Shanghai Futures Exchange declined by 8.2 percent to 187,444 tonnes.

Although global inventories declined, the primary driver of the price action this week has been the weaker U.S. Dollar. This tends to drive up demand from foreign buyers.

Technical Analysis

The weekly main trend is up. If the rally continues then the next targets are two former tops at $3.2245 and $3.2415.

The support is the old top at $3.0625, followed by a major Fibonacci level at $3.0230.

Because of the prolonged move up in terms of price and time, the best sign of a top will be a weekly closing price reversal top.

Forecast

If the upside momentum continues then look for investors to make a run at a steep uptrending angle at $3.1425. Overtaking this angle will put the market in an extremely bullish position. This could create enough upside momentum to challenge a long-term downtrending angle at $3.1915, followed by $3.2245 and $3.2415.

The inability to overcome $3.1425 will not indicate the presence of sellers, but it may mean the buying pressure is weakening.