Comex High Grade Copper Futures (HG) Technical Analysis – May 12, 2016 Forecast

July Comex High Grade Copper tried to rally on Wednesday after the U.S. Dollar weakened, however, gains were limited because of concerns over demand from China and growing supply in Shanghai and at the London Metal Exchange.

Technically, the main trend is down according to the daily swing chart. The trend is in no position to turn up, but it is in the window of time for a potentially bullish closing price reversal bottom. This will likely be triggered by profit-taking and aggressive short-covering.

A trade through 2.0905 will reaffirm the minor downtrend and a move through 2.0790 will reaffirm the major downtrend.

Based on the close at 2.1035, the direction of the market today is likely to be determined by trader reaction to the uptrending angle at 2.1105.

A sustained move under 2.1105 will indicate the presence of sellers. The first target is a minor bottom at 2.0905. The next two targets are main bottoms at 2.0790 and 2.0705. Taking out these levels will likely fuel an acceleration into the next major uptrending angle at 2.0595.

A sustained move over 2.1105 will signal the presence of buyers. This could trigger an acceleration to the upside since the next major targets don’t come in until 2.1405 and 2.1435.

Watch the price action and read the order flow on a test of 2.1105 today. This will tell us if the bulls are regaining control or if the bears are maintaining the selling pressure.

The catalyst behind the price action today will likely be the U.S. Dollar. A stronger dollar will be bearish for the dollar-denominated copper market. A weaker dollar will be bullish, however, gains are likely to be limited because of the low demand and big supply.