Copper, Gold, Aluminium, Silver and the AUD/USD

As mentioned in my earlier post I’m slowly getting back in to some charting after a two week break. The Commodity space has me interested given the relevance of this sector on my home currency, the AUD$. The post from this morning looked at the performance of Oil and the impact this has on the CAD$. In this post I have taken a look at the commodities that have a greater impact on the AUD$. Oil does impact the AUD$ but this currency is more affected by the fortunes of the mineral/metal commodities such as Copper, Gold, Aluminium and Silver and so it is these commodities that I have charted below.

Copper:

Copper yearly: Copper, like many commodities, has been hurt by the strong US$ and global slowdown. The last three yearly candles have been bearish with 2015 printing the worst of these. The psychological ‘2’ handle managed to hold out for 2015 but any break and hold below this would suggest that the 1.50 level might be next to be tested. Note how the ‘2’ handle is near the 61.8% fib of the 2001-2011 swing high move and the ‘1.50’ handle is near the 78.6% fib of this move:

CopperYearly

Copper monthly: any close and hold below 2.0 could tie in with a break of support from the triangle trend line. A close and hold below the 2.0 level and this trend line would be bearish and I’d then be looking for a test of the 1.50 handle:

CopperMonthly

Copper weekly: a wedge trend line has been broken but the larger triangle support trend line is still intact.

CopperWeekly

Aluminium:

Al yearly: I don’t have a lot of data here but the bearish yearly candle is a fairly common theme for this and other commodities:

ALyearly

Al monthly: Aluminium managed to print a bullish engulfing candle off trend line support for December though and so I’ll be watching for any bullish follow through. However, a bearish break of the triangle trend line would bring the 1250 level into focus.

ALmonthly

Gold:

Gold yearly: it’s no surprise that Gold printed a bearish yearly candle for 2015. The strong US$ and stock market and global deflationary pressure has weakened demand for this commodity.

Gold yearly

Gold monthly: Price action is still conforming to a potential bullish descending wedge though. Any developing US$ weakness would help to develop this pattern but it’s still very much ‘watch and wait’ here. Levels to watch include the wedge trend lines and, below this, the $1,000 whole number psych-level and the $950 region given this is the 78.6% fib level from the 2008-2011 swing high move:

GoldMonthly

Silver:

Silver yearly: Silver printed a bearish yearly candle as well but is holding above the $10 S/R level:

SilverYearly

Silver monthly: as with Gold, there could be a bullish descending wedge building here so the trend lines are worth watching. Keep an eye on the $10 level if there is any bearish wedge breakdown though:

SilverMonthly

AUD/USD:

A/U yearly: it will be of no surprise that the AUD/USD printed a bearish yearly candle for 2015 given the stronger US$ and slump with commodity prices.

AUyearly

A/U monthly: it managed to close the year above a key 61.8% fib level though:

AUmonthly

This MT4 monthly chart shows how the A/U is resting near a very congested zone with the triangle TL as well as two major Fib levels:

  • 61.8% fib of the major swing high move from 2000 to 2011 near 0.715 and
  • 78.6% fib of the 2008-2011 swing high move near 0.71.

AUmonthlyCloud

A/U weekly: whilst it recently broke up through a 14 month bear trend line we have yet to see any bullish follow through. Note the consolidation within yet another triangle though. The fate of the metal commodities and the US$ will be important here in determining whether any breakout might be bullish or bearish:

AUweekly

USDX monthly: I discussed the US$ in my earlier post today and it has a great impact on the trading instruments discussed in this article as well. US$ strength will hurt commodities and the AUD/USD. Conversely, in Yin and Yang fashion, any US$ weakness will help to keep these instruments supported.

DXYmonthly

Summary: Many metal commodities, as well as the AUD/USD, have printed bearish yearly candles for 2015 on the back of a stronger US$ and weaker demand from the slowing of global growth. However, these commodities are still holding above their various support levels, for the time being at least, and it is these levels that are worth watching as New Year trading gets underway. Keep an eye on the following levels:

  • Copper: 2.0 and the triangle support TL and, below that, is the 1.50 level.
  • Aluminium: the triangle support TL and, below that, the 1250 level.
  • Gold: the wedge trend lines and, below that, the $1,000 and $950 levels.
  • Silver: the wedge trend lines and, below that, the $10 level.
  • AUD/USD: watch for any support from the monthly chart’s triangle TL and fib levels as well as from the more recent weekly-chart based triangle trend lines.

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