Comex High Grade Copper Price Futures (HG) Technical Analysis – Needs to Confirm Wed. Reversal Bottom to Continue Rally

Copper futures were whipped around on Wednesday by the volatility in the Forex markets, especially by the U.S. Dollar, and increased demand for commodities and higher risk assets like stocks. The dollar-denominated asset was driven through the recent swing bottom at $3.0140 into its lowest level since April 4 before posting a higher close and a dramatic closing price reversal bottom.

July Comex High Grade Copper futures settled at $3.0690, up $0.0065 or +0.21%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, the closing price reversal bottom suggests that momentum may be shifting to the upside.

A trade through $3.0765 will confirm the chart pattern. This could lead to the start of a 2 to 3 day counter-trend rally. A move through $3.0100 will negate the chart pattern and signal a resumption of the downtrend. The main trend will change to up on a trade through $3.1485.

The main range is $2.9585 to $3.2180. Traders are still showing respect for its retracement zone at $3.0885 to $3.0575. This zone is controlling the longer-term direction of the market. On Wednesday, copper closed inside this zone.

The short-term range is $3.1485 to $3.0100. Its retracement zone at $3.0795 to $3.0955 is the first upside target. This zone is straddling the main 50% level at $3.0885.

The chart pattern strongly suggests that buyers will have to overtake $3.0955 before we can get excited about the upside potential of the market.

Daily Swing Chart Technical Forecast

Based on Wednesday’s close at $3.0690, the direction of the copper market on Thursday is likely to be determined by trader reaction to yesterday’s high at $3.0765.

A trade through $3.0765 will not only indicate the presence of buyers, but it will also confirm the closing price reversal bottom. Look for a labored move over this level with targets lined up at $3.0795, $3.0885 and $3.0955.

Look for an acceleration to the upside if $3.0955 is taken out. This could trigger a move into $3.1315, followed by $3.1485.

The inability to overcome or sustain a move over $3.0765 will signal the presence of sellers. This could lead to a pullback into $3.0575. If this price fails then we’re likely to see a retest of $3.0100. The next major target under this level is $2.9585.