HRC futures registered their highest single-day percentage gain since March 2025, with the prompt-month contract surging $67 to settle at $1,192/st. The rally broke decisively above the $1,150 resistance level that had capped price action in May, and the session closed near the highs, indicating buying pressure remained strong into the close.
The RSI at 72 is in overbought territory for the first time since the March 2025 correction. While overbought conditions can signal an imminent pullback, in strongly trending markets (like the current tariff-driven environment), RSI can remain above 70 for extended periods. The 2018 Section 232 announcement triggered a similar pattern with RSI above 70 for three consecutive weeks.
Trading volume was approximately 60% above the 30-day average, confirming the breakout as genuine. Open interest rose 3.2%, suggesting new longs are entering the market rather than covering shorts. The upward-sloping futures curve (contango) steepened, with the spot-month July contract at $1,192, August at $1,170, and Q4 at $1,125.
The $1,200-1,220 zone is the next resistance band, representing the March 2026 high. A close above $1,220 would open the path to $1,300, a level not seen since August 2025. On the downside, $1,150 (previous resistance turned support) and $1,080-1,100 (50-day MA and previous range floor) provide support levels in case of a tariff-related reversal.
The RSI at 72 says wait for a pullback; the tariff catalyst says buy now. The correct approach is to split the difference: lock 30% of Q3 volume at $1,190 and set limit orders for another 30% at $1,080-1,100. Do not leave more than 40% uncovered, as a confirmed tariff increase could drive HRC to $1,250+ in two weeks.