- DAX (DE30) climbs back to the key resistance zone
- EURUSD in the vicinity of the upper limit of the wedge pattern ahead of tomorrow’s FOMC decision
- COPPER eyes push higher, trades near upper limit of the price channel
Global stock market continue to move higher and the German DAX (DE30) is no exception. Following a break above the downward sloping trendline bears managed to deliver only a minor correction but it was quickly recouped by buyers. The index is already trading higher and is approaching the resistance zone ranging 11800-11900 pts. Local lows from February and March 2018 can be found there as well as the 200-session moving average. Bears may try to use this combination to regain control over the market. In case this turns to be true, the first support level to watch is localized near early-March low. Note that in this area one can also find the 50-session moving averages channel that used to be respected by price during the past few months.
EURUSD is another interesting market to watch. FOMC starts it quarterly meeting today and will publish updated economic forecasts and “dot-chart” tomorrow evening (6:00 pm GMT). Jerome Powell will hold press conference half an hour later. Taking a look at the past 4 FOMC meetings (blue, vertical lines on the chart below) one can see that EURUSD tended to strengthen in the run-up to the meeting and then take a sharp turn lower following the meeting. USD weakened in the past few days and EURUSD moved close to the vicinity of the upper limit of the descending wedge pattern. However, in case this formation was to be played out in a textbook manner, the pair should break higher and with potential breakout range at 1.1550. Will it be the case this week or are we set for another dive following FOMC meeting?
Moving to commodities let’s take a look at the copper market. The industrial metal had a stellar start to the year thanks to trade optimism as well as lack of the feared steep slowdown in the global economy. In turn, price manage to surge 14% YTD. Buyers managed to defend the $6250 support level (red ellipsis). Moreover, a flag pattern can be spotted on the D1 interval and it hints that in case price breaks higher an upward move towards $6870 handle may be on cards. It should be noted that 50-, 100- and 200-session moving averages bode well for buyers what is another confirmation of the upside potential copper holds. Failure in the US-China talks as well as further builds in the exchanges’ stockpiles are among potential risk factors that could lock price within trading range for longer.