Commodity prices have been routed over recent months due to the stronger US$ and weaker global demand. The obvious question to ask here is how much further are they likely to fall, especially given that the US$ looks like it might try and break the 100 barrier to start its next leg higher. Many commodities are down near major support though and if the US$ should stumble at all at this psychological 100 hurdle, then, some might try and carve out a bounce from these low levels. Any bullish continuation for the US$ might not have them turn negative but…some are sure getting low!
US$ Index monthly: the 100 level is key here as any break and hold above this barrier would support a move up to the 120 confluence region. This is the region of the Bull Flag target and a previous S/R zone but a move up to here would put enormous pressure on commodities and their related currencies.
Copper Monthly: the ‘2’ handle looks to be the next key level with the whole number, triangle trend line and a fib level all potentially stepping up to be some support. However, any break and hold below this would suggest that the next target might be down near 1.50 as this is a long-term S/R level:
Aluminium monthly: the 1250 level might be the target here and this is the lowest support for the data that I have:
Gold monthly: This still has the look of a bullish descending wedge to me. Any bearish breakdown though would suggest a trip to the psychological 1,000 level, at least, with Fib levels suggesting potential bearish targets after that.
Nickel monthly: will the 8,000 whole number level step up as any support?
Natural Gas monthly: will the 2 whole number level step up as any support here?
Silver monthly: there is a bit of a bullish wedge look to this too, as for Gold, BUT any bullish breakout move on the US$ above 1000 would suggest this metal might visit the whole-number $10 level:
Oil monthly: the $40 is holding as support for now:
Summary: I’ll be watching the US$ for any break or respect of the 100 level so as to see what impact this has on the above commodities as they trade at these major low levels.