Yahoo Finance Comex High Grade Copper Price Futures (HG) Technical Analysis – Hawkish Fed Could Be Bearish for Copper
March Comex High Grade Copper futures are trading firmer early Wednesday on the hopes of increased demand. Tuesday night, President Trump said he would ask the U.S. Congress for $1.5 trillion to improve the country’s infrastructure. It’s going to be difficult to get this request passed in Congress, but nonetheless, copper investors seem to be happy with the idea.
Copper prices will also be sensitive to the movement of the U.S. Dollar on Wednesday because it is a dollar-denominated commodity. A weaker dollar tends to increase demand for copper. Prices could weaken if the dollar begins to strengthen.
Driving the price action in the dollar today will be the U.S. Federal Reserve’s monetary policy statement, due to be released at 1900 GMT. The Fed is not expected to raise interest rates, but it could trigger a rally in copper if it puts out a dovish statement.
Contrarily, a hawkish statement by the Fed, calling for more aggressive rate hikes later this year could drive the dollar higher, while putting pressure on copper.
Daily Swing Chart Analysis
The main trend is down according to the daily swing chart. A trade through $3.1080 will signal a resumption of the downtrend.
The main trend will change to up on a move through $3.2765. This could fuel a rally into the last main top at $3.3220, the September 19, 2013 main top at $3.3245 and the June 5, 2013 main top at $3.3580.
The short-term range is $3.3220 to $3.1080. Its 50% level or pivot is $3.2150. This price is controlling the direction of the market.
The major support is the retracement zone at $3.1325 to $3.0880. This zone stopped the selling last week at $3.1080.
Daily Swing Chart Forecast
Based on the early price action, the direction of the copper market today will be determined by trader reaction to the pivot at $3.2150.
A sustained move over $3.2150 will indicate the presence of buyers. This could create the upside momentum needed to challenge $3.2580, and $3.2765. The latter is the trigger point for a rally into $3.220 and $3.3245.
A sustained move under $3.2150 will signal the presence of sellers. The daily chart is wide open to the downside so we have to watch for a possible acceleration into $3.1325 then $3.1080.
This article was originally posted on FX Empire
