Comex High Grade Copper Price Futures (HG) Technical Analysis – May 22, 2017 Forecast

July Comex High Grade Copper futures are trading slightly lower and inside Friday’s range early in the session as investors await the openings in London and the U.S. later today. The early price action suggests investor indecision and impending volatility.

Investors are likely waiting to see the direction of the U.S. Dollar. A weaker dollar could underpin copper prices if it leads to increased foreign demand. Traders could also respond to the news that an estimated 9,000 workers at the giant Grasberg copper mine operated by the Indonesian unit of Freeport McMoRan Inc. will extend a strike for a second month.

Last week, copper closed higher thanks to the weaker Dollar and receding worries over China’s economy. Soothing regulatory comments and the People’s Bank of China’s cash injection offset worries over tighter banking regulations and economic growth.

Technical Analysis

The main trend is down according to the daily swing chart, but momentum is attempting to shift to the upside.

The main range is $2.6945 to $2.4725. Its retracement zone is $2.5835 to $2.6070. This zone is the primary upside target. Trader reaction to this zone will determine whether copper prices move higher or form a potentially bearish secondary lower top.

Currently, the market is testing a major 50% level at $2.5835.

Forecast

Based on Friday’s close at $2.5815, the direction of the copper market on Monday will be determined by trader reaction to the 50% level at $2.5835.

The inability to overcome $2.5835 will signal the presence of sellers. This could drive the market back into an uptrending Gann angle at $2.5725. We could see an acceleration to the downside if this angle fails.

Crossing to the weak side of a downtrending angle at $2.545 will mean the selling is getting stronger. This could lead to a test of the uptrending angle at $2.5225.

A sustained move over $2.5835 will signal the presence of buyers. This could lead to an acceleration into the Fibonacci level at $2.6070 and the downtrending angle at $2.6195.

Looking at the early price action, watch for an upside bias to develop on a sustained move over $2.5835 and a downside bias on a sustained move under $2.5225.