Comex High Grade Copper Price Futures (HG) Technical Analysis – July 7, 2017 Forecast

September Comex High Grade copper futures are consolidating for a second day early Friday, following Wednesday’s steep sell-off. The market is being underpinned by a weaker U.S. Dollar and the threat of strikes at mines in Chile.

The price action suggests investors are unwilling to chase prices higher until there is evidence showing supply is tightening.

In other news, Chile’s Antofagasta Minerals said this week that it was facing potential strikes from workers at two mines.

On Friday, copper traders will be watching the U.S. Non-Farm Payrolls report because it could have an impact on the direction of the U.S. Dollar. A bullish NFP report could pressure copper prices.

Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the June 30 top at $2.7185.

A major retracement zone is providing resistance at $2.6675 to $2.7105. This range stopped the rally last week at $2.7185.

The main range is $2.5490 to $2.7185. Its retracement zone at $2.6340 to $2.6140 is the primary downside target. Since the main trend is up buyers could show up on a test of this zone. An uptrending angle also passes through this zone at $2.6240, making it a valid downside target also.

Forecast

Based on the current price at $2.6580 and the earlier price action, the direction of the gold market today is likely to be determined by trader reaction to the major 50% level at $2.6675.

A sustained move under $2.6675 will indicate the presence of sellers. This could trigger an acceleration to the downside with a cluster of numbers the potential targets. These include $2.6435, $2.6385, $2.6340 and $2.6240. The best buying opportunity is likely to come on a test of $2.6240.

A sustained move over $2.6675 will signal the presence of buyers. This could lead to a quick test of the downtrending angle at $2.6785. Overtaking this angle could trigger an acceleration into the next downtrending angle at $2.7385. This is the last potential resistance angle before the major Fibonacci level at $2.7105 and the main top at $2.7185.

Basically, treat $2.6675 like a pivot. Trending traders may try to trigger a resumption of the rally over this level. Aggressive counter-trend traders may try to generate further weakness.