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Comex High Grade Copper Price Futures (HG) Technical Analysis – June 5, 2018 Forecast

By:
James Hyerczyk
Published: Jun 5, 2018, 05:56 UTC

Based on Monday’s price action and today’s early trade, the direction of the copper market is likely to be determined by trader reaction to the major 50% level at $3.1315.

Copper Wire

Copper prices are trading slightly lower and inside yesterday’s range early Tuesday with bullish traders taking a breather after driving prices to their highest level since May 22 the previous session.

At 0530 GMT, July Comex High Grade Copper futures are trading $3.1285, down $0.0060 or -0.19%.

Comex High Grade Copper
Daily July Comex High Grade Copper

Monday’s rally was driven by a weaker U.S. Dollar Index and worries over potential supply disruptions. Increased demand for risky assets also drove the market higher. Shorts were squeezed out of the market amid wage talks at BHP’s, Escondida mine in Chile. If the talks are unsuccessful, miners may call for a strike, potentially leading to a disruption in production.

Despite the strong rally, bullish traders are still a little nervous because the area currently being tested has stopped rallies three times recently. Furthermore, gains are likely being limited by concerns over demand in China. Fitch Ratings are bearish on metals, citing reports that say China’s economic growth could slow to about 4.5 percent over the medium term.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. A trade through $3.1485 will change the main trend to up.

The minor trend changed to up on Monday when buyers took out the minor top at $3.1170. This also shifted momentum to the upside.

Buyers are also attempting to cross to the bullish side of a major 50% level at $3.1315. Accomplishing this will change the bias to the upside.

The main range is $2.9585 to $3.2180. Its retracement zone is $3.0885 to $3.0575.

The short-term range is $3.1485 to $3.0100. Its retracement zone at $3.0955 to $3.0795 is new support. Inside this zone is the main 50% level at $3.0885.

Daily Swing Chart Technical Forecast

Based on Monday’s price action and today’s early trade, the direction of the copper market is likely to be determined by trader reaction to the major 50% level at $3.1315.

A sustained move over $3.1315 will indicate the presence of buyers. This could lead to a quick move into the main top at $3.1485. Taking out this top will change the main trend to up.

The daily chart indicates there is plenty of room to the upside to rally over $3.1485. If this move generates enough upside momentum, we could see an eventual move into main tops at $3.1890 to $3.2180.

A sustained move under $3.1315 will signal the presence of sellers. This could trigger an acceleration to the downside with a series of retracement levels at $3.0955, $3.0885 and $3.0795 the next potential downside targets.

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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