Comex High Grade Copper Price Futures (HG) Technical Analysis – In Position to Make New High for Year if Strike Continues

Copper closed higher on Friday after recovering from early session weakness. Prices rose to nearly a new high for the year earlier in the week on concerns over a potential supply disruption at the Escondida mine in Chile. The high for the year was reached on January 2 at $3.3260.

July Comex High Grade Copper futures settled at $3.3000, up 0.0250 or +0.76%.

According to a note from ANZ, investors “continue to fret about potential supply-side disruptions” after union leaders at Escondida, which is operated by BHP, submitted wage demands, sparking fears of a possible strike.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. It turned up on June 5 after consolidating for six weeks. A trade through $3.3155 will signal a resumption of the uptrend. The next target is the high for the year at $3.3260 and the December 28 main top at $3.3420.

The market isn’t close to changing the trend to down, but Monday will be the eighth day up from the last bottom, putting copper in the window of time for a closing price reversal top.

The first minor support is a previous top at $3.2180. This is followed by a major Fibonacci level at $3.1955

Daily Swing Chart Technical Forecast

Based on Friday’s close at $3.3000, the direction of the July Comex High Grade Copper futures contract is likely to be determined by trader reaction to the February 16 top at $3.3040.

A sustained move over $3.3040 will indicate the presence of buyers. This may be enough to generate the upside momentum needed to overtake last week’s high at $3.3155 and the December 28 top at $3.3420.

The inability to overcome $3.3040 will signal the presence of sellers. The daily chart indicates there is plenty of room to the downside with the first two targets coming in at $3.2180 and $3.1955.

This is a news driven market so look for heightened volatility and the possibility of a two-sided trade if the news turns bearish. This is likely to occur if the strike is settled.