Comex High Grade Copper Price Futures (HG) Technical Analysis – China Factory Growth Pushes Copper to 3-month High

September Comex High Grade Copper futures touched their highest level since April 5, driven by better than expected factory growth in top metals consumer China.

According to data released early Friday, China’s factories grew at the quickest pace in three months in June, buoyed by strong new orders in a sign of stabilizing growth, though traders expect a further slowdown in the world’s second biggest economy is inevitable as Beijing cracks down on debt risks.

Helping to put a cap on copper’s gains was the firmer U.S. Dollar.

In other news, copper gained for the fourth consecutive quarter, advancing 7 percent in the first half. Copper stocks in the London Metals Exchange warehouses rose by 6,400 tonnes to 249,700 tonnes, LME data showed, indicating that supplies were adequate.

Technical Analysis

The main trend continued on Friday as buyers took out the May 1 top at $2.7000. If the upside momentum continues then we should see an eventual test of the March 30 top at $2.7425. Taking out this price with conviction could trigger an acceleration to the upside because the next main target is the high for the year at $2.8495.

The main range is $2.8495 to $2.4850. Its retracement zone is $2.6675 to $2.7105. Holding above this zone will continue to support the strong upside bias. Falling back below it will mean the market still needs time to build a support base.

On the downside, the nearest support angle comes in at $2.6590.

On the upside, the first target angle drops in at $2.7310. We could see a technical bounce on the first test of this angle, but if it’s taken out with rising volume, the rally could extend into the $2.7425 main top.

Overtaking both the downtrending angle and the main top will mean the buying is getting stronger. This could trigger a surge into the next downtrending angle at $2.7900. This is the last potential resistance angle before the $2.8495 main top.