G’day Mates!

The Australian Dollar has been in a downspin over the last Month losing about 6% of its value against the US dollar. But Thursday’s action looks to have reversed that and now the prospects for those down under are looking up. I trade Equities and options so let’s take a look using the Currency Shares Australian Dollar ETF, $FXA. The daily chart below shows the break Thursday of the descending wedge and move higher. It gapped above the 20 day Simple Moving Average (SMA) and looks ready for more upside. It has a rising Relative Strength Index (RSI) making a new

high and a Moving Average Convergence Divergence (MACD) indicator that is about to cross positive. Both support more upside on this timeframe. The next serious resistance comes at 106 and then 107.80-108. But the weekly chart will get a great bump if that were to happen. Turning higher this week off of the rising 50 week SMA a move up to 107.50-108 would create a triple top and with a RSI that is rising and a MACD improving. Over 108 it would have a target on a Measured Move to 115, a new high multiyear high, if not all time high. Why do I care about this? Typically the Australian Dollar is strong when prices of commodities are strong. Seeing that the prospects for the Aussie Dollar are good just reinforces the strength in commodities and suggests that you look for more commodity plays.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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