Daily December High Grade Copper

Comex High Grade Copper Futures Technical Analysis – September 3, 2013 Forecast

Over the week-end, China and the Euro Zone reported better than expected manufacturing PMI numbers, leading to a strong gain on Monday in the electronic trading session. Since the futures markets were closed, traders are looking for a gap higher opening this morning.

Today, the U.S. is set to release the latest data on ISM Manufacturing PMI and Construction Spending. Stronger than expected reports will bring the Fed closer to tapering later in the month. This should strengthen the dollar which may limit copper’s upside potential today. Because the attack on Syria is off the table for at least a week, there is greater demand for higher risk assets overnight. This may underpin the market.

Technically, the copper market stopped on a major 50% level at 3.2243 on Friday. Aggressive counter-trend buyers may like the market down here because it is a value area. If a short-term range is forming between 3.3950 and 3.2230, then look for the start of a retracement back to 3.3090 to 3.3293.

Daily December High Grade Copper
Daily December High Grade Copper

Regaining uptrending Gann angle support at 3.2935 will be another sign of strength. This could trigger a rally into a pair of downtrending angles at 3.2950 and 3.3450.

The fundamentals are a bit confusing based on the overnight trade. If trader believe the Fed will begin tapering in late September then theoretically, the market should feel downside pressure. If investors decide that improving Chinese, Euro Zone and U.S. economies will lead to greater demand then look for a rally.

Today’s ISM Manufacturing PMI and Construction Spending reports should set the tone for the day. Look for increased volatility when these reports are released at 10:00 a.m. ET. 

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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