Copper prices rose on Friday. I’d like to tell you it was because of the bullish fundamentals. However, I suspect it the result of investors covering short spread positions. Earlier in the week, prices declined after inventories rose, indicating supplies were healthy. Buyers may have also been influenced by strong manufacturing data from top metals consumer China.
On Friday, July Comex High Grade Copper finished the session at $3.0985, up $0.0360 or +1.16%.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. Nonetheless, the market was able to finish the week higher.
A trade through $3.1485 will change the main trend to up. A move through $3.0100 will signal a resumption of the downtrend.
The market continues to be manipulated by a series of retracement levels.
The main 50% to 61.8% zone is $3.1315 to $3.0575. The short-term retracement zone is $3.0795 to $3.0955.
Daily Swing Chart Technical Forecast
Based on Friday’s close at $3.0985, the direction of the July Comex High Grade futures contract is likely to be determined by trader reaction to the short-term Fibonacci level at $3.0955.
A sustained move over $3.0955 will signal the presence of buyers. If this move can generate some upside momentum, buyers will have a clean shot at the main 50% level at $3.1315. Overtaking this level will put the market in a position to test the main top at $3.1485.
The main top at $3.1485 is a potential trigger point for an acceleration to the upside.
A sustained move under $3.0955 will indicate the presence of sellers. Early sellers could run into problems because of 50% levels at $3.0885 and $3.0795. The market begins to open up under $3.0795 with $3.0575 the next likely downside target. This is also the trigger point for an acceleration into $3.0100.