Comex High Grade Copper Price Futures (HG) Technical Analysis – Daily Chart Indicates Room to $3.0465

Copper prices plunged on Wednesday to their lowest level since February 13 as the U.S. Dollar advanced on prospects of higher interest rates and growth in China’s manufacturing sector slowed in February.

May Comex High Grade Copper futures settled at $3.1325, down 0.0540 or -1.69%.

The dollar advanced to a five-week high against a basket of currencies on Wednesday after Fed Chairman Powell’s upbeat views on the U.S. economy bolstered bets on further interest rate hikes this year. A stronger dollar tends to lead to lower demand for dollar-denominated assets like copper.

As far as China’s manufacturing sector is concerned, when manufacturers are not as optimistic as before, that tends to weigh on demand expectation for metals and other commodities in general.”

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. It turned down when sellers took out the previous swing bottom at $3.1750 on Tuesday. A trade through $3.2635 will change the main trend to up.

If the downside momentum continues to build then we could see a near-term test of the February 9 main bottom at $3.0465 over the near-term.

The main range is $3.0465 to $3.2905. Its retracement zone is $3.1685 to $3.1400. This zone is helping to control the near-term direction of the copper market. Wednesday’s close under $3.1400 indicates a downside bias is developing.

Daily Swing Chart Technical Forecast

Based on Wednesday’s close at $3.1325, the direction of the copper market on Thursday is likely to be determined by trader reaction to the short-term Fibonacci level at $3.1400.

A sustained move under $3.1400 will indicate the presence of sellers. The daily chart indicates there is plenty of room to the downside with the next major target bottom coming in at $3.0465.

Overcoming and sustaining a move over $3.1400 will signal the return of buyers. This could drive the market into the 50% level at $3.1685. Overcoming this level will indicate the buying is getting a little stronger.