Comex High Grade Copper Price Futures (HG) Technical Analysis – Reaction to Retracement Zone Will Determine Next Major Move

July Comex High Grade Copper futures finished slightly higher on Monday, but remained inside yesterday’s range. This suggests investor indecision and impending volatility. Copper prices were supported by expectations of higher demand from top consumer China after a report showed a resilient economy despite a modest monthly decline in manufacturing activity.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $3.0520 will signal a resumption of the downtrend.

The market isn’t close to turning the main trend to up, but it is down eight days from the main top at $3.2180 which puts it in the window of time for a potentially bullish closing price reversal bottom.

The main range is $2.9585 to $3.2180. The market is currently sitting inside its retracement zone at $3.0885 to $3.0575. Trader reaction to this zone is likely to determine the longer-term direction of the copper market.

An even wider range is $3.3040 to $2.9585. Its 50% level or pivot is $3.1315. This price is also controlling the longer-term direction of the market.

Daily Swing Chart Technical Forecast

Based on Monday’s price action, the direction of the copper market today is likely to be determined by trader reaction to $3.0885 and $3.0520.

A sustained move over $3.0885 will indicate the presence of buyers. This could generate the upside momentum needed to challenge the major 50% level at $3.1315. Since the main trend is down, we could see a technical bounce on the first test of this level. This is also a trigger point for an acceleration to the upside with the next targets a pair of tops at $3.1890 and $3.2180.

A sustained move under $3.0520 will signal the presence of sellers. Look for a possible acceleration to the downside if this price is taken out with rising volume and conviction. This could trigger the start of an eventual move into the main bottom at $2.9585.

If selling weakness under $3.0520, make sure you have volume on your side because of the possibility of a closing price reversal bottom. Copper traders like to set bear traps.