Daily September High Grade Copper

Comex High Grade Copper Futures Analysis – July 8, 2013

September High Grade Copper is trading a little better this morning following Friday’s sharp sell-off. Oversold conditions are most likely the reason for today’s firm trade. Other technical factors may be contributing to the early support since the market is testing a short-term retracement area.

Late last week, the market dropped sharply following the release of the U.S. Non-Farm Payrolls report. The Labor Department reported a gain of 195,000 jobs versus economist guesses of 165,000. Interest rates rose on the news since it probably means the Fed will soon begin tapering its aggressive bond-buying program. Higher interest rates make the U.S. Dollar a more attractive investment, driving down demand for commodities such as copper that are priced in dollars.

Besides the U.S. Dollar, investors are also watching the Chinese economy since China accounts for about 40% of the world’s copper demand. A slowdown in the Chinese economy could lead to a drop in demand for copper.

Technically, the main trend is down on the daily chart. A move through 3.1790 will turn the main trend to up while a trade through 2.9855 will mean a resumption of the downtrend.

Daily September High Grade Copper
Daily September High Grade Copper

Currently, the main range is 2.9855 to 3.1790. This range has formed a retracement zone at 3.0823 to 3.0594. This morning, the market is straddling this zone, meaning the market is balanced.

Uptrending Gann angle support is at 3.0655. This is followed by another Gann angle at 3.0255. On the upside, the nearest resistance is 3.1925. This angle is not expected to be tested.

Without any major fundamental reports today, the market could trade sideways. A lot of the action will depend on the movement in the U.S. Dollar Index. A strong dollar could pressure prices while a weaker dollar could encourage profit-taking or short-covering following last week’s sharp sell-off. 

Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.

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