Comex High Grade Copper Price Futures (HG) Technical Analysis – Look for Steep Break if $2.9040 Fails

The selling in copper subsided last week, allowing the market to claw back some of its loss for the month. However, the move wasn’t enough to change sentiment. Traders are currently facing low demand and rising inventories as well as geopolitical uncertainty over the possibility of a trade war between the U.S. and China.

May Comex High Grade Copper settled at $3.0255, up $0.0235 or +0.78%.

The main trend is down according to the daily swing chart. A trade through $3.1920 will change the main trend to up. A move through $2.9375 will signal a resumption of the downtrend.

The minor trend turned up last week when buyers took out $3.0240. This may be the first sign that momentum is getting ready to shift to the upside. However, there are retracement levels in the way that could stop the rally.

The first level of resistance is a longer-term Fibonacci level at $3.0680. This is followed by a short-term Fibonacci level at $3.0950 and a longer-term 50% level at $3.1190. Buyers will have to overcome these levels to shift momentum to the upside.

The inability to overcome the retracement levels will indicate the market is still being controlled by the sellers. If they increase the selling pressure then look for a return to last week’s low at $2.9375.

If the momentum is strong enough to take out $2.9375 then the selling could extend into the September 22 bottom at $2.9325 and the August 3 bottom at $2.9040.

The most important level on the daily chart is $2.9040. This price is the trigger point for a steep decline into at least $2.6680.

The near-term direction of the copper market is likely to be determined by how investors respond to the series of retracement levels at $3.0680, $3.0950 and $3.1190.