Copper supply risks in Chile and Peru: Can HG breakout above $6.58 resistance?

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Copper jumps 2.79% to $6.51 today

Highlights

Copper prices remain supported as supply disruptions in Chile and Peru raise concerns about potential output shortages.
Strong Chinese demand and copper's indispensable role in data center and power infrastructure underpin bullish fundamental sentiment.
Technical signals indicate strong bullish momentum, with copper expected to trade between $6.4673 and $6.5843 over the next few sessions, though overbought readings suggest caution.

Supply disruptions and China demand reinforce bullish copper positioning

Copper supply risks in Chile and Peru are heightening concerns about tighter physical markets and potential production shortfalls, directly supporting the uptrend in Copper Futures, according to Riotimesonline. At the same time, resilient demand from China continues to underpin structural consumption levels, adding a steady foundation for pricing. Finance Yahoo also highlights copper’s critical role in powering AI data centers and power infrastructure, reinforcing the commodity’s importance in the broader industrial landscape.

Overbought signals persist as buyers maintain technical control

On the technical front, HG has surpassed the MA-20 at $6.4015 and MA-50 at $6.3282 on the hourly chart, while maintaining its position above the MA-200 at $5.9488 on the daily timeframe. The Ichimoku Kijun sits close by at $6.4197 and currently acts as immediate support. Momentum indicators remain robust, with MACD and ADX in active buy setups and persistent upward pressure. However, RSI at 85.56, along with overbought signals from both Stoch RSI and CCI, reflect an overheated market environment. Bull/Bear Power readings show buyers in control, and the Awesome Oscillator confirms the current uptrend.

Upside bias dominates as volatility bands define near-term risk

HG is expected to trade in a volatility band between $6.4673 and $6.5843 over the next two to three sessions. With a reported 79% probability of further upside compared to a 21% chance of a pullback, a continuation of gains is currently more likely than a reversal. If consolidation occurs, prices may remain range-bound inside this corridor. Breakout scenarios would require a close above $6.5843 for additional upside, while a drop below support at $6.4197 would signal a shift toward near-term weakness.

Anton Kharitonov, expert at Traders Union, believes copper’s move is built on solid supply concerns and steady demand from China. He sees the strong price action supported by bullish momentum, but warns that extremely overbought readings could limit near-term gains. The analyst remains wary of technical exhaustion and notes the risk of a pullback if key support gives way. "Until copper decisively clears $6.5843 or confirms a durable base above current levels, I am staying cautious and prefer to await clearer direction."

Earlier, analysts noted that copper was displaying bullish momentum above key technical levels, with a high probability of further gains. The current uptrend is not only reinforced by escalating supply risks and strong demand but also signals that sustained momentum could trigger a breakout if $6.5843 is decisively surpassed in the coming sessions.

Source of Data: HG Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.