Comex High Grade Copper Price Futures (HG) Technical Analysis – Weekly Forecast

July Comex High Grade Copper had a volatile week, highlighted by bouts of sideways action, a steep plunge then finally a recovery into the close.

Copper drifted sideways-to-lower early in the week on worries about China’s slowing economic growth and tighter capital markets in the world’s top metals consumer. The slowdown in demand is coming from restructuring/reform and risk controls.

At one point last week, prices plunged after political uncertainty in the United States undermined expectations that President Trump would be able to boost infrastructure spending.

The market recovered from its losses on May 18 to end the week with a gain of more than 2 percent thanks to a weaker U.S. Dollar and receding worries over China’s economy. Soothing regulatory comments from China and a central bank cash injection offset worries about growth.

Technical Analysis

The main trend is down according to the weekly swing chart. A trade through $2.4725 will signal a resumption of the downtrend with $2.4625 the next target. This price is the trigger point for an even steeper break with the next major bottom coming in at $2.1110.

The main range is $2.1110 to $2.8400. Its retracement zone is $2.4755 to $2.3895. This zone is currently providing support. Holding above this level will indicate that buyers are coming in to prevent a steep sell-off. A sustained move under the 50% level at $2.4755 will signal the presence of sellers. A sustained move under the Fibonacci level at $2.3895 will indicate the selling is getting stronger.

The new short-term range is $2.8400 to $2.4725. If the market continues to rally then its retracement zone at $2.6565 to $2.7000 will become the primary upside target.

Forecast

Based on Friday’s close at $2.5815, the direction of the copper market this week is likely to be determined by trader reaction to the downtrending angle at $2.5600.

A sustained move over $2.5600 will indicate the presence of buyers. This could trigger an acceleration to the upside with the first target a 50% level at $2.6565. This is followed by a resistance cluster at $2.7000. Crossing to the strong side of the uptrending angle at $2.7110 will put the market in a bullish position.

A sustained move under $2.5600 will signal the presence of sellers. The weekly chart indicates there is room to the downside with the first target the major 50% level at $2.4755. This is followed by a minor bottom at $2.4725 and a main bottom at $2.4625.

If $2.4625 fails as support then look for the selling to possibly extend into $2.4110 and $2.3895.

Watch the price action and read the order flow at $2.5600 all week. Trader reaction to this angle will tell us if the buyers are gaining control, or if the sellers are resuming control.