Comex High Grade Copper Price Futures (HG) Technical Analysis – August 4, 2017 Forecast

Position-squaring and a weaker U.S. Dollar ahead of today’s U.S. Non-Farm Payrolls report are helping to underpin September Comex High Grade Copper futures shortly before the Comex opening.

The market has lost some of its recent upside momentum this week due to a private survey which pointed to slower growth in China’s services sector. However, the rally could resume if the U.S. jobs report is weak enough to reduce the chances of a Fed rate hike later this year.

The U.S. Non-Farm Employment Change is expected to show the economy added 182K jobs in July. The Unemployment Rate is expected to fall to 4.3% from 4.4%. Average Hourly Earnings are expected to rise 0.3%, up from 0.2%.

Average hourly earnings are a good indicator of inflation. If they come in lower than expected then this will be bearish for U.S. interest rates and the U.S. Dollar because it will reduce the chances of a Fed rate hike this year.

Technical Analysis

The main trend is up according to the daily swing chart. A move through $2.9200 will signal a resumption of the uptrend and send the market into the May 15, 2015 main top at $2.9375. This price is the trigger point for a potential acceleration to the upside.

A trade though $2.8600 will change the main trend to down. The next target is the major 50% level at $2.8305.

The main range is $2.6310 to $2.9200. If $2.8305 fails as support then look for a break into its retracement zone at $2.7755 to $2.7415.

The new short-term range is $2.9200 to $2.8600. Its 50% level or pivot is $2.8900. If counter-trend sellers come in to stop the rally on a test of this level then look for a secondary lower top to form. This could lead to a change in trend.

Forecast

Based on the current price at $2.8880 and the early price action, the direction of the copper market today is likely to be determined by trader reaction to the short-term pivot at $2.8900.

Overtaking $2.8900 will indicate the presence of buyers. This could lead to a test of a pair of downtrending angles at $2.9000 and $2.9100. The latter is the last potential resistance angle before the $2.9200 main top.

A sustained move under $2.8900 will signal the presence of sellers. A break under $2.8800 will indicate the selling is getting stronger. This could lead to a break into $2.8600.

Taking out $2.8600 will change the main trend to down. This could trigger an acceleration into the major 50% level at $2.8305 and the uptrending angle at $2.8210. Look for a steep decline if the angle fails to stop the selling.