AUD/USD, gold and copper all broke key technical support on the same day, with copper futures sliding more than 5% and gold and the Australian dollar following lower. Australia's status as a major commodity exporter ties the AUD to swings in gold and copper, and today all three broke down together.
Gold, copper and AUD/USD are all moving sharply lower in the same session, with gold down 1.85%, copper futures down 5.4% and AUD/USD off 0.8%. Each market has its own technical story, but the common thread is that key support levels gave way at the same time.
Australia is a major exporter of gold and copper, and when those commodity prices fall, the value of its exports can decline, reducing the flow of foreign money into the economy. That can weigh on the Australian dollar. Copper also acts as a barometer for demand from China, Australia's largest trading partner, so a sharp drop in copper can signal weakening Chinese and global demand — a trend that works against the growth-sensitive Aussie dollar.
Gold breaks a key support cluster
Spot gold has dropped below a support cluster near $4,355.77, an area combining a rising trend line, the 100-day moving average and the 200-bar moving average on the four-hour chart. That break opens the door toward the 50% midpoint and swing area near $4,315 to $4,320. If buyers cannot hold there, focus shifts to $4,282 and then the 61.8% retracement near $4,230. Buyers need to reclaim $4,355.77 to take back control; until then, that former support becomes resistance.
Copper reverses after fresh highs
Copper futures reached a new high just yesterday before reversing sharply, and the price is now down more than 5% today. The decline took copper below its 100-hour moving average at $6.7404 and its 200-hour moving average at $6.6856, pushing price into a swing area near $6.516 that has drawn buyers and sellers since August. Holding that level could bring a corrective rebound, but a sustained break below it would open the way toward the 100-day moving average near $6.382.
AUD/USD follows commodities lower
AUD/USD touched its highest level since May yesterday, testing the upper swing area between 0.7221 and 0.7228, but buyers could not extend the move. Sellers then pushed the pair below its rising 100-hour moving average and through the 200-hour moving average near 0.71936, shifting the short-term bias toward the downside. The pair is now testing a rising trend line near 0.7154; a break below that level would point toward the swing area near 0.7139 and then the 38.2% retracement at 0.71168.
Source: Investinglive RSS Breaking News Feed
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