Comex High Grade Copper Price Futures (HG) Technical Analysis – September 20, 2017 Forecast

Oversold prices and a rally by Aluminum to its highest level in five years are helping to boost copper prices on Wednesday. Hedge funds and commodity prices are still long despite a recent liquidation by a few of the weaker longs.

Gains could be limited because rising copper stocks helped push the discount for cash copper over the three-month contract to nearly $50 a tonne. On Monday, it rose above $50 which was its highest since December 2009. This tends to indicate that more metal will be delivered over the coming days.

Traders are also likely to react to the Fed announcements at 1800 GMT because they will move the U.S. Dollar and copper is a dollar-denominated commodity. A hawkish Fed will be bullish for the dollar when could hurt demand for copper, driving prices lower. A dovish Fed will be bearish for the dollar and could lead to increased foreign demand for copper.

Daily Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the $3.1785 main top on November 5.

A trade through $2.9310 will signal a resumption of the strong downside momentum. A trade through $2.8935 will change the main trend to down with $2.8795 the next downside target.

The main retracement zone at $2.9150 to $2.8525 is the next major downside target. Since the main trend is up, buyers may step in on a test of this area since it is a value zone.

The short-term range is $3.1785 to $2.9310. If there is a rally then its retracement zone at $3.0550 to $3.0840 will become the primary upside target.

Daily Forecast

Based on the current price at $2.9805 and the earlier price action, the direction of the copper market today is likely to be determined by trader reaction to the steep downtrending angle at $2.9585.

A sustained move over $2.9585 will indicate the presence of buyers. If this creates enough upside momentum over the near-term then look for the rally to extend into $3.0550 to $3.0685.

A sustained move under $2.9585 will signal the presence of sellers. This could trigger a break into $2.9310, followed by $2.9150.