Comex High Grade Copper Futures (HG) Technical Analysis – May 31, 2016 Forecast

July Comex High Grade Copper futures pressed higher on Friday despite the stronger dollar, which indicates there is something different about this rally. If it’s not being driven by the dollar then it must be manipulation by the hedge and commodity funds.

Although the fundamentals are bearish, money managers created an oversold market and had no one else to sell to, so they began to cover positions in the hopes of creating a short-covering rally. Their intention is to drive the market into resistance area where they can re-establish their short positions.

So at this time, we still like the short side but are not willing to fight the momentum. We too, would like to short this market, but in a value area.

The main trend is down according to the daily swing chart. The main trend will turn up when buyers take out the 2.1390 swing top. Momentum has been to the upside since the 2.0380 main bottom was formed on May 19.

The main range is 2.3055 to 2.0380. Its retracement zone at 2.1720 to 2.2035 is the primary upside target. A downtrending angle passes through this zone at 2.1755, making it a valid upside target also.

The short-term range is 2.1390 to 2.0380. Its retracement zone is 2.0885 to 2.1005. Three consecutive closes on the strong side of this zone confirm the upside bias. The 50% and 61.8% levels are new support.

Based on the close at 2.1140, the direction of the market today is likely to be determined by trader reaction to the uptrending angle at 2.1080.

A sustained move over this angle will indicate the presence of buyers. This could create enough upside momentum to challenge the main top at 2.1390. Taking out this level will turn the main trend to up and could trigger an upside breakout into the price cluster at 2.1720 to 2.1755.

A sustained move under 2.1080 will signal the presence of sellers. This could lead to a test of the short-term retracement zone at 2.1005 to 2.0885. The daily chart begins to open up to the downside under 2.0885 with the next target angle coming in at 2.0730.

If this market is getting ready to turn higher then buyers will come in on a test of the short-term retracement zone. They are going to try to produce a secondary higher bottom.