Comex High Grade Copper Price Futures (HG) Technical Analysis – Prices Could Tumble to $2.6680 if $2.904 is Taken Out With Conviction

Copper prices fell to their lowest level since September 22 on Monday, pressured by a sharp rise in inventories and continuing worries about a possible trade war between the U.S. and China.

May Comex High Grade Copper futures settled at $2.9700, down $0.0230 or -0.77%.

Copper inventories in LME warehouses rose by 35,000 tonnes to 352,750 tonnes, exchange data showed on Monday. On-warrant stocks have nearly doubled this year and are at their most elevated since September 2016.

Additionally, open interest in LME copper, a measure of activity in the global contract, fell to its lowest in more than two years last week. In Shanghai, however, open interest has jumped since mid-January to three-year highs, suggesting large short positions have been building in China.

In other news, hedge fund and money managers cut their net long positions in COMEX copper contracts in the week to March 20, the latest data from the U.S. Commodity Futures Trading Commission showed.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through the September 22 main bottom at $2.9450 will reaffirm the downtrend. This could trigger a further decline into the August 3 main bottom at $2.9040.

Copper is not in a position to change the main trend to up, but it is in the window of time to form a potentially bullish closing price reversal bottom. This could fuel a change in momentum and a possible 2 to 3 day counter-trend rally.

The main range is $2.9040 to $3.3335. Its retracement zone at $3.0680 to $3.1190 is resistance. This zone is also controlling the longer-term direction of the market. Trading below it is helping to give the market a downside bias.

Daily Swing Chart Technical Forecast

Based on Monday’s close at $2.9700 and the price action, the direction of the market today is likely to be determined by trader reaction to the bottom at $2.9450.

A sustained move over this level will indicate the presence of buyers. If this move creates enough upside momentum, we could see an eventual move into the main retracement zone at $3.0680 to $3.1190.

A sustained move under $2.9450 will signal the presence of sellers with targets coming in at $2.9325 and $2.9040. The latter is the trigger point for an acceleration to the downside with a major 50% level at $2.6680 the next major target.