Comex High Grade Copper Price Futures (HG) Technical Analysis – December 06, 2017 Forecast

Copper futures posted its biggest one-day drop in two years on Tuesday with prices hitting their lowest level since early October as inventories rose and the dollar firmed on expectations of U.S. tax reform.

March Comex High Grade Copper settled at $2.9460, down 0.1440 or -4.66%.

The dollar rose against a basket of currencies on continued optimism surrounding the overhaul of the U.S. tax system. A stronger greenback makes dollar-denominated copper less desirable for foreign investors. Copper was also pressured by inflows of stocks at LME-registered warehouses.

Daily Swing Chart Analysis

The main trend is down according to the daily swing chart. The trend turned down last week when sellers took out $3.0550, however, the steep sell-off was delayed until Tuesday when sellers pounded the industrial metal through last week’s low at $3.0510, reaffirming the downtrend.

Tuesday’s plunge stopped at $2.9430, slightly below the October 3 bottom at $2.9455. The next sell-off is likely to be limited because of potential support levels at $2.9250, $2.9135 and $2.8990.

We’re calling the current main range $2.9135 to $3.2790. Its retracement zone is $3.0960 to $3.0530. This zone provided support nearly all of November. Yesterday’s sell-off has turned this zone into new resistance.

Daily Swing Chart Forecast

Copper is trading slightly higher early Wednesday. The market is inside yesterday’s range which indicates investor indecision and possibly another volatile session.

Holding above yesterday’s low at $2.9430 and the previous bottom at $2.9455 will indicate that investors are showing respect for the September 28 bottom at $2.9250, the September 22 bottom at $2.9135 and the August 2 bottom at $2.8990.

The trader indecision is likely coming from some investors who believe yesterday’s sell-off was overdone. This may encourage profit-taking, triggering a short-covering. The daily chart indicates there is room to the upside with the Fibonacci level at $3.0530 the first target.

If sellers re-emerge and $2.9430 is taken out with conviction then we could see a labored break into at least $2.8990.