Comex High Grade Copper Price Futures (HG) Technical Analysis – Big Turnaround Sets Up Market For Further Upside Action

September Comex High Grade Copper futures rebounded from early session weakness to post a strong close on Wednesday. Buyers responded to weakness in the U.S. Dollar and evidence of tightening supply.

The U.S. Dollar retreated from its high against a basket of currencies after touching a five-week on Tuesday. A steep drop in crude oil helped weaken the dollar because of its effect on inflation. Lower inflation could close down the pace of future Fed rate hikes.

Additionally, the global world refined copper market showed a 5,000 tonnes deficit in March, compared with 102,000 tonnes surplus in February, industry data showed earlier in the week.

Technical Analysis

The main trend is up according to the daily swing chart. If the upside momentum is strong enough to take out the last main top at $2.6610 then this will signal a resumption of the uptrend.

A trade through $2.5490 will turn the minor trend to down. A move through $2.5290 will change the main trend to down.

The short-term range is $2.6610 to $2.5490. Its retracement zone is $2.6050 to $2.6185. This zone was tested on the close. This area is controlling the near-term direction of the market. Buyers want to take out this zone in an effort to make $2.5490 a new swing bottom. Sellers want to stop the rally inside this zone in order to form a secondary lower top.

Forecast

The copper market found support on the uptrending angle at $2.5625 that helped turn the market higher on June 6 and June 15. The subsequent rally took the market into the downtrending angle at $2.6210.

If the buying is strong enough to take out the Fibonacci level at $2.6182 then look for the upside momentum to also take out the downtrending angle at $2.6210. This could trigger a spike into a pair of downtrending angles at $2.6410 and $2.6510. The latter is the last potential resistance angle before the $2.6610 main top.

On Thursday, we’ll be watching the price action and reading the order flow at $2.6050 to $2.6185 all session. Trader reaction to this zone will set the tone for the rest of the week.