Comex High Grade Copper Price Futures (HG) Technical Analysis – Despite the Weak Dollar, Buyers Have Been Scarce

March Comex High Grade Copper futures surprised traders with a lower close on Friday despite the weaker U.S. Dollar. A steep plunge in the Greenback tends to bring out the copper bulls because it is a dollar-denominated commodity.  However, this hasn’t been the case lately with copper prices continuing to look weak since reaching a multi-year high on December 28.

Worries over demand from China and concerns about ample supply may be the catalysts behind the weakness.

Last week, it was reported that China’s exports and imports growth slowed in December after unexpectedly surging the previous month, adding to signs of ebbing economic growth as the government extended a crackdown on financial risks and factory pollution.

China’s unwrought copper imports fell 4.3 percent in December from a month earlier, but still recorded their second-highest level in 2017.

Daily Technical Swing Chart Analysis

The main trend is down according to the daily swing chart. After eight sessions of sideways-to-lower trading and a loss of the momentum that fueled the rally throughout December, the main trend turned down on January 11 when sellers took out the swing bottom at $3.2125.

There wasn’t much of a follow-through to the downside which may be because the market had been down so long before the change in trend. Selling volume is going to have to increase on a move through $3.2065 to generate the downside momentum needed to drive the market into its first objective.

The main trend will turn back to up on a move through $3.2745.

The short-term range is $3.3220 to $3.2065. Its 50% level or pivot is $3.2645. Crossing back over to the strong side of this level will indicate the return of buyers.

The main range is $2.9430 to $3.3220. Its retracement zone at $3.1325 to $3.0880 is the primary downside objective.

Friday’s session closed with copper in a tight range between $3.2745 and $3.2065. Trader reaction to these levels will determine whether the buying or the selling is getting stronger.

Given the current fundamental situation, it makes sense for sellers to take control and drive the market into the objective at $3.1325 to $3.0880. This area is a value zone and a test of it will probably bring in new buyers.

As mentioned earlier, if speculators notice the weak dollar they may turn into buyers at current levels, but if they are looking for value, they’ll allow the market to break into the value zone.