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Copper Price Action – Expect Sharp momentum moves in coming days

Trading copper was quite challenging in recent sessions, especially finding short-term trading setups on lower time frame. Price action was completely hectic because of constant price gaps and less liquidity. Take a look at the daily chart of Copper

Copper Price action can cause sharp momentum moves in coming days

We could see the same Market structure since Sep 2017; many traders would look at the chart in hindsight and consider it a trend! But it’s a directional Range, which is more suitable for mean reversion or Range trading. The swings on both sides are evidential activity of Buying and selling pressure. Both bulls and bears are fighting it out to determine control over price behavior and Market sentiment.

From Feb 2018 onwards, Price action become even more volatile, unstable because of Chinese Holidays and decline in Chinese market participation rate (because of Chinese New year). It’s a well-known fact that Chinese are the major players in Copper market; they’re responsible for nearly 2/3 of the trading volumes! Decline in liquidity (due to declined Chinese trading volume) is the major reason for the whipsaw and unwanted price gaps.

But the conditions are likely to change in coming days. Reopening of Chinese markets and pick up in trading volume can cause sharp momentum moves in copper, so traders should be prepared for it. Keep an eye on the 4h and Daily chart for potential momentum trading setups.

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About the Author:

Balaji is a Speculator, Investor and Trader (All in All!!!) and self published author. Trading in the Markets since decade, have seen more ups and downs along with institutional trader's lifestyle. He usually trades Nifty, Bank Nifty, Commodities, Futures cum Options around both Indian and global Markets. Balaji applies highly analytical and systematic Price Action strategies He blogs passionately about Trading strategies, Price Action Trading, Technical analysis, Macro events, Market setups, Financial and Economical topics. Apart from Trading and Blogging, Balaji also mentors aspiring Traders and Investors on becoming successful in highly competitive financial Markets.

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