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Copper Futures HG1!

High Grade Copper poised for further gains in the coming weeksHigh Grade Copper continues to trade higher, with prices now within reach of critical resistances at the USD2.7200 retracement and USD2.7345 year high of November 2016. However, there is risk of a short-term pullback before a clear break is seen, as daily studies become overbought. Support is at congestion around USD2.6000, but slippage beneath here should remain limited, as background readings continue to improve and investors maintain a buy-into-weakness strategy. A later close above USD2.7345 will confirm continuation of the broad 2016 rally, and open up congestion around USD2.8000 as investors adopt an outright bullish stance. Still higher is the USD2.8700, (61.8%) retracement of the 2014-2016 fall.
COMEX:HG1!
by Michael_Macdonald-XATSUK
HG Copper expected to extend gains in the coming monthsThe bounce from the January trendline has accelerated sharply higher, with fresh demand at USD2.2000 pushing prices above critical resistance at the USD2.3235 high of March. Fibonacci resistance at the USD2.6805, (50%) retracement of the 2014-2016 fall has been reached, with potential for still further strength in the coming months towards congestion around USD2.8000 as background studies also improve and investors adopt an outright bullish stance. Beyond here is the USD2.8560, (61.8%) retracement. Setbacks are expected to stabilise above USD2.3235, as investors maintain a buy-into-weakness strategy, but if broken, focus will turn back to USD2.2000 as sentiment turns cautious once again.
COMEX:HG1!
by Michael_Macdonald-XATSUK
Copper's Parabolic Move UnstableThere is no doubt copper's move is substantial as chart chasers crowd on a few group think narratives: Inflation is around the corner. Is it? Headline inflation in the United States in 1.47 percent. To put that in perspective, it's down four percent from July 2008 highs of 5.4 percent. To add further perspective to that, inflation is cyclical. It has risen, from previously declining, into every U.S. recession (except two) is seven decades. Each of those bouts ended up in a deflationary recession. Copper prices, and the narrative of higher inflation, is coinciding with a much stronger DXY. Due to global central planning to weaken their respective currencies, the dollar has remained rather strong. Either the dollar plummets or copper does. Unless the greenback breaks through 92.50, the 2011 bull market continues higher, pending more Q.E. from the Federal Reserve. China is growing. Not really. Internal data suggests China is growing less than half of its official growth figure. Fiscal stimulus is a possibility, but the Communist government has a long-standing affective of pumping liquidity and generating fiscal deficits to inflate on asset bubble to another. In a note from July 2013, I said "The excessive liquidity in China has led to a huge redundancy in investments and speculation, and this has contributed to excess capacity in both manufacturing and infrastructure. This inefficiency of channeling the free-flowing liquidity undermines China's development." This will continue. The People’s Bank of China has increased net liquidity to the financial sector by a staggering +2,022% year-to-date. The commodity burst has finally reached a bottom. Really? Too early to tell, especially if growth continues to slow. Price discrepancy is way out of wack. With a z-score on the daily and weekly of over 2.5, price will have to come down. RSI is at 87, while the stochastic indicator is highly overbought. Copper does have momentum on its side, but near-term could see a pullback to 2.30 to consolidate.
COMEX:HG1!Short
by MacroView_Research