Comex High Grade Copper Futures (HG) Technical Analysis – March 27, 2017 Forecast

May Comex High Grade Copper futures traded in a range on Friday in reaction to the lack of activity due to the vote in Washington on health care reform, but ended up lower on concerns that the end of the strike at the world’s top copper mine in Chile would lead to an increase in supply.

The health care vote in Washington caused some jitters because a defeat for President Trump could delay his plans for increased infrastructure spending, affecting future demand. Commodity prices have soared since November on expectations Trump will increase spending on infrastructure.

The end of the 43 day strike at BHP Billiton’s Escondida mine in Chile may have pressured prices because of worries over increased supply.

Technical Analysis

The main trend is down according to the daily swing chart. The trend will turn up on a trade through $2.7000. A move through $2.5875 will signal a resumption of the downtrend with $2.5585 the next likely target.

The market is currently straddling a series of retracement levels, helping to hold it in a range and creating a choppy two-sided trade. On the upside is a pair of 50% levels at $2.6295 and $2.6460. On the downside is a pair of 61.8% levels at $2.6125 and $2.6010.

If there is a breakout to the upside then look for a possible rally into a major retracement zone at $2.6975 to $2.7300.

Forecast

Based on Friday’s close at $2.6310, the direction of the copper market on Monday is likely to be determined by trader reaction to the 50% level at $2.6295.

A sustained move over $2.6295 will indicate the presence of buyers. This could fuel a rally into $2.6460 and $2.6500. The latter is the trigger point for an acceleration to the upside inside another downtrending angle at $2.6950.

A sustained move under $2.6295 will signal the presence of sellers. The next move is likely to be labored because of potential support levels at $2.6185, $2.6125 and $2.6010.

The market begins to expand to the downside under $2.6010 with new targets at $2.5885 and $2.5875. This is followed by an uptrending angle at $2.5735. This is the last potential support angle before the $2.5585 main bottom.

Watch the price action and read the order flow at $2.6295 all session, trader reaction to this level will set the tone and direction of the market today.