Copper inventories rise on London Metal Exchange: HG technical outlook

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Copper gains 0.65% today to $6.59

Highlights

Three-month copper inventories on the London Metal Exchange have increased, raising concerns about oversupply and pressuring prices.
US dollar movements have made copper more affordable to non-dollar buyers, but inventory remains the main pricing factor.
Copper trades near the session high at $6.5958 with bullish momentum; price is expected to consolidate between $6.5403 and $6.6513.

Rising LME inventories weigh on copper amid oversupply fears

Inventories of three-month copper on the London Metal Exchange have recently increased, leading to greater available supply in the market and putting pressure on copper prices by raising concerns about oversupply. According to Brecorder, this shift in inventory levels serves as a primary factor shaping sentiment in the copper market. Secondary influences, such as recent moves in the US dollar, have made copper more affordable for buyers using other currencies, but the principal dynamic remains centered on inventory data.

Bullish momentum supported by bullish signals and strong support

On the technical front, HG/USD is trading above its MA-20 and MA-50 on the H1 timeframe and well above its MA-200 on the daily chart. The Ichimoku Kijun at $6.5818 is identified as the nearest support. Indicators are sending mostly bullish signals: MACD is on a buy signal, RSI and CCI are in buy territory, while ADX is neutral and Stochastic RSI shows no overbought condition. Bull/Bear Power suggests buyers have the upper hand intraday, and the Awesome Oscillator also points to upward momentum.

Upside favored for copper as breakout risk dominates

Looking ahead, the most likely scenario is for copper to consolidate within a typical volatility range of $6.5403 to $6.6513. An upside breakout above resistance could trigger further gains, while a bearish scenario would require a clear move below current support. The probability of a downward move is seen as very low, with bullish momentum favored in the short term.

Viktoras Karapetjanc, Traders Union expert, sees the copper market supported by strong technical momentum, with prices holding above key averages. He notes that rising inventories on the London Metal Exchange are adding a supply-side challenge, yet recent sentiment remains constructive given limited downside pressure. The analyst believes bullish signals from indicators and resilient price action outweigh short-term concerns about oversupply. "Copper’s momentum is steady and, despite inventory upticks, I expect consolidation above support with a favorable outlook toward higher levels if resistance is breached."

Earlier, analysts noted that copper was consolidating near highs amid technical strength, with macroeconomic shifts such as US policy moves and inventory adjustments shaping a generally range-bound outlook. The latest increase in exchange inventories adds a fresh supply-driven risk, making developments in inventory data the key factor for traders to monitor as they assess whether bullish momentum can be sustained above the $6.5818 support level.

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.