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Comex High Grade Copper Price Futures (HG) Technical Analysis – Dovish Fed Targets $3.1020, Hawkish Fed Could Take Out $3.0150

By:
James Hyerczyk
Published: Mar 21, 2018, 17:21 UTC

Based on the current price action and possible closing price reversal bottom, traders should brace for volatility and a possible two-sided trade.

Copper Wire

May Comex High Grade Copper futures are trading higher at the mid-session after recovering from a three-month low. A weaker U.S. Dollar may be fueling some of the short-covering. However, gains are likely being limited in anticipation of a hawkish Fed in today’s monetary policy statement and economic forecasts.

The intraday reversal may have been fueled by the news of another year of supply deficit for copper. According to the International Copper Study Group (ICSG), the global refined copper market recorded another year of supply-usage deficit in 2017.

Comex High Grade Copper
Daily May Comex High Grade Copper

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. Earlier today, the downtrend was confirmed when sellers took out yesterday’s low at $3.0290.

At the mid-session, the market is trading higher after posting a lower-low earlier. It is also trading above the mid-point of the session and above the opening. This is the makings of a potentially bullish closing price reversal bottom. This type of chart pattern tends to lead to the start of a 2 to 3 day rally.

The main range is $2.9585 to $3.3335. Its retracement zone at $3.1020 to $3.1460 is controlling the longer-term direction of the market at this time. A sustained move under this level will continue to support a downside bias. This zone should be considered resistance.

The new short-term range is $3.1920 to $3.0150. Its retracement zone is $3.1035 to $3.1245. This zone falls inside the main retracement zone and should also be considered resistance.

Daily Swing Chart Technical Forecast

Based on the current price action and possible closing price reversal bottom, traders should brace for volatility and a possible two-sided trade.

If the Fed is dovish and the dollar weakens then copper could surge into $3.1020.

If the Fed is hawkish and the dollar strengthens then copper could take out today’s intraday low at $3.0150. This could create the downside momentum needed to challenge the major bottom at $2.9585.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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