Copper traded higher early in the session, but the industrial metal pared gains on Thursday as the U.S. Dollar hovered near a five-month high against the Euro and amid worries over slower demand in top copper user China.
At 1200 GMT, July Comex High Grade Copper is trading $3.0830, up $0.0125 or +0.41%.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. However, there is no momentum. A trade through $3.1310 will signal a resumption of the uptrend.
The first sign of weakness will be a trade through $3.0345. The main trend will change to down on a move through $3.0140.
The price action is also being controlled by a pair of retracement levels.
The main range is $2.9585 to $3.2180. Its retracement zone at $3.0885 to $3.0575 is controlling the near-term direction of the market.
The short-term retracement range is $3.2180 to $3.0140. Its retracement zone at $3.1160 to $3.1400 is acting like resistance. This zone stopped the rally earlier in the week.
Daily Swing Chart Technical Forecast
Based on the overnight price action and the current price at $3.0885, the direction of the copper market today is likely to be determined by trader reaction to the main 50% level at $3.0885.
A sustained move under $3.0885 will signal the presence of sellers. This could drive the market into the main Fibonacci level at $3.0575. If this price fails then look for the selling to extend into a pair of bottoms at $3.0345 and $3.0140.
A sustained move over $3.0885 will indicate the presence of buyers. This is a possible trigger point for an acceleration into a series of potential resistance levels at $3.1160, $3.1310, $3.1315 and $3.1401. The latter is the trigger point for another surge.