• Copper has fallen a little bit during the trading session here on Friday and what has been a fairly quiet day the Thursday session was a shooting star and that was preceded by a shooting star on Wednesday, so it makes a lot of sense that we see some hesitation.
• The $6 level above is a large, round psychologically significant figure and an area that I think a lot of people will be paying close attention to.
• It obviously causes a lot of headlines and of course, copper is very sensitive to inflation and growth.
• Right now, we are seeing a bit of that in the United States and other countries as well. So that should continue to put upward pressure on copper.

Tariffs and More

Beyond that, we also have talk of tariffs and uncertainty when it comes to copper markets coming into the United States. So ultimately, I think you’ve got a situation where we continue to squeeze higher. However, it’s also worth noting that the market is very extended at this point. So, I’m looking for short-term pullback. I would love to see copper drop towards the $5.50 level and bounce. That would be a very interesting place for me to buy.

If we drop below there, then the $5.25 level is worth paying close attention to also because it’s not only an area that’s been previous resistance, but it also features the 50 day EMA racing towards there. Either way, I don’t have any interest whatsoever in trying to short the copper market. It does tend to move in very segmented areas, a dollar at a time. So, I think you’ve got a situation where you’re just waiting for a little bit more value. However, if we were to just simply explode to the upside, and let’s be honest here, there could be headlines over the weekend that make this happen. Clearing the $6 level opens up a move to roughly $6.50, based on the measured move. I don’t really know where we go from there, but it certainly makes quite a bit of sense.

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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.