- The copper market has been somewhat choppy during the trading session on Wednesday as we approach a massive resistance barrier.
- I know a lot of you are not trading, but it is a very important market to pay attention to as it gives us an idea as to how the economy may or may not be performing globally.
- Sometimes known as “Dr. Copper”, a lot of traders will look to this as a signal on whether or not risk appetite is going to climb or fall.
Copper and China
For years, it’s been a correlation between copper in China that a lot of people pay close attention to as demand for copper coming out of China was a huge driver of where this market went, and then by extension the idea of how the global economy is performing, as the Chinese produce a much for the rest of the world. The situation is somewhat mixed in China to say the least, so while copper has done fairly well, the reality is that one of the biggest consumers have struggled a bit.
Another thing that you can use this market for is a reason to think about what to do with the Australian dollar, as the Aussie economy is heavily levered to hard assets such as copper, iron, and gold. The market continues to be very noisy and choppy, but quite frankly that’s not unheard of in the copper market, as we tend to grind and “barcode” for long periods of time.
The technical analysis continues to look slightly positive, but I’ll be watching very closely the $5 level, as it is an area that’s been like a brick wall multiple times, and as we approach that level, it’s obvious that there has been a certain amount of selling as we approach that region, so if you are in fact trading in the copper market, short-term traders will probably continue to take advantage of this obvious brick wall.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
