Comex High Grade Copper Price Futures (HG) Technical Analysis – Reaffirms Uptrend with Help from Euro Zone PMIs

September Comex High Grade Copper futures surged early Friday, reaching their highest level since May 2. The catalysts behind the price action were higher Chinese stock markets and strong European manufacturing data. Copper is now on track for its best week since mid-March.

Upbeat European manufacturing PMIs also helped drive copper prices higher, climbing to a more than six-year high, but U.S. factory data disappointed.

In Europe, Flash Manufacturing PMI in France, Germany and the Euro Zone beat expectations. U.S. Flash Manufacturing PMI came in at 52.1, lower than the 53.1 estimate. U.S. Services PMI came in at 53.0, under its 53.9 forecast.

In China, blue chip stocks closed at an 18-month high, boosting optimism about the world’s largest consumer of industrial metals, after MSCI’s decision to include Chinese shares in a key index this week.

The weaker U.S. Dollar also helped drive up foreign demand for dollar-denominated copper.

Friday’s trade through $2.6610 reaffirmed the uptrend. The market did back off into the close after touching $2.6625, but if the upside momentum continues next week, we could see another drive into the May 1 top at $2.7000.

Upside momentum died on Friday shortly after copper crossed to the strong side of a pair of angles at $2.6500 and $2.6525. This angles will be early resistance next week.

On the downside, support came in at $2.6090. This angle, moving up at a pace of $0.01 per day from the June 15 bottom at $2.5490, has been guiding copper higher for six-sessions. Falling below this angle next week will signal the return of sellers.

With the trend and momentum up and the strong close on the weekly chart, we’re looking for copper to make a run at $2.7000 next week.