Comex High Grade Copper Price Futures (HG) Technical Analysis – July 12, 2017 Forecast

A weaker U.S. Dollar and supply concerns are helping to drive September Comex High Grade Copper futures higher on Wednesday.

The dollar plunged against a basket of currencies on Tuesday after President Trump’s eldest son released a chain of emails suggesting he welcomed Russia’s help in last year’s election campaign.

As far as supply is concerned, workers voted this week to approve a strike at a mine in Chile. Earlier in the year, strikes in Indonesia and at the world’s largest copper mine in Chile, helped eat up supplies.

The news is supportive over the short-run, but the pace of the Chinese economy will have a bigger influence on the longer-term direction of prices.

Technical Analysis

The main trend is up according to the daily swing chart. Today’s rally has helped form a new main bottom at $2.6310. A trade through $2.7185 will signal a resumption of the uptrend. A move through $2.6310 will change the main trend to down.

The market is currently trading inside a major long-term retracement zone at $2.6675 to $2.7105.

The main range is $2.5490 to $2.7185. Its retracement zone at $2.6340 to $2.6140 stopped the recent break at $2.6310 on July 10, helping to trigger the current rally.

The short-term range is $2.7185 to $2.6310. Its retracement zone is $2.6750 to $2.6850.

The market is currently trading on the strong side of three retracement levels at $2.6850, $2.6750 and $2.6675, helping to contribute the market’s strong upside bias.

Forecast

Based on the current price at $2.6905, copper is well supported by a cluster of levels at $2.6850, $2.6750, $2.6710 and $2.6675. Holding above these levels is helping to generate the strong upside momentum.

If the buying continues then look for the rally to extend into the first downtrending angle at $2.7010. This is followed by a resistance cluster at $2.7100 to $2.7105. This is the last potential resistance area before the $2.7185 main top.

Copper will start to weaken if $2.6851 fails as support. Look for a choppy trade inside $2.6851 to $2.6675. Watch for a shift in momentum on a sustained move under $2.6675.

Fundamentally, look for a bullish tone if the dollar continues to weaken.