Comex High Grade Copper Price Futures (HG) Technical Analysis – July 20, 2017 Forecast

September Comex High Grade copper futures broke sharply on Wednesday as investors reacted to a stronger U.S. Dollar, however, the market was underpinned by expectations of increased demand from China.

In other news, workers at Chile’s Zaldivar copper mine, owned by Antofagasta PLC, will vote on a new contract offer later this week after a vote to strike last week prompted government-mediated negotiations.

Unionized workers at mines in Peru, the world’s second-biggest copper producer, started an indefinite, nationwide strike on Wednesday to protest the government’s proposed labor reforms. The government doesn’t expect the strike to have too much of an impact on prices.

Technical Analysis

The main trend is up according to the daily swing chart. However, it looks as if momentum is getting ready to shift to the downside. A trade through $2.7375 will signal a resumption of the uptrend. This could trigger a further rally into the March 31 top at $2.7425.

The short-term range is $2.6310 to $2.7375. Its retracement zone at $2.6845 to $2.6715 is the primary downside target. Since the main trend is up, buyers are likely to show up on a test of this area.

Forecast

Based on the current price at $2.7110, the direction of the copper market the rest of the session is likely to be determined by trader reaction to the uptrending angle at $2.7110.

A sustained move over $2.7110 will indicate the return of buyers. If volume also increases on the move then don’t be surprised by a rally back to $2.7375 to $2.7425 over the near-term. Further declines in the U.S. Dollar will help the dollar-denominated copper market.

A sustained move under $2.7110 will signal the presence of sellers. If the selling pressure is strong enough, we could see an acceleration to the downside with the first target the 50% level at $2.6845. The steep break will likely be fueled by a stronger U.S. Dollar.