DAX 40 faces pressure, copper surges to 2-month high while AUD/USD hovers above support
Wall Street extended its decline as Powell’s valuation warnings weighed on sentiment, while energy stocks outperformed and copper rallied to a two-month peak. The DAX 40’s rebound is faltering near resistance, and AUD/USD is holding above key support as traders weigh global macro signals.
Macro update
Wall Street closed lower for a second session as investors took profits after Federal Reserve (Fed) Chair Jerome Powell warned of stretched valuations, with materials stocks leading declines following a 17% drop in Freeport-McMoRan on force majeure at its Grasberg mine.
Energy outperformed, rising 1.2% as crude hit a 3-week high on falling US inventories, while Lithium Americas nearly doubled on reports of potential US government investment and loans.
Oracle slipped on bond sale plans, Micron declined after earnings, though US new home sales surged 20.5% in August.
Overseas, Japan’s Nikkei 225 gained slightly on dip-buying, but European markets looked set for a flat start amid valuation concerns and cautious Fed signals.
DAX 40 remains under pressure
The DAX 40's recovery from its 23,285 mid-September low seems to have stalled in the 23,700 region with renewed downside pressure being in play while it remains below its 19 September high at 23,785.
A drop through Wednesday's 23,500 low would be expected to engage the early September low at 23,483.
DAX 40 daily candlestick chart
AUD/USD hovers above support
AUD/USD remains above this week's lows at $0.6575 and is trying to head back up towards Wednesday's high at $0.6628. It would need to be exceeded for the 13-month high at $0.6707 to be back in view.
Failure at $0.6575 on a daily chart closing basis may lead to the $0.6568-to-$6564 minor support zone being revisited. Further down meanders the 55-day simple moving average (SMA) at $0.6538.
AUD/USD daily candlestick chart
Copper rallies to 2-month high
The copper price surged higher on Wednesday and hit a 2-month high at $4.8893, a rise above which would put the 22 April high at $4.9328 and, more importantly, the $4.9635 late April peak on the map.
Support may be found along the 200-day SMA at $4.7979.
Copper daily candlestick chart
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