Greetings! It’s been a crazy month for the Comdolls and as we head into the last week of August, which tends to be a bit slower, I’d like to throw up a few charts for some possible longer term ideas.
On the weekly chart, we can see the AUD/USD has fallen around 1200 pips in the matter of a few weeks – is it overdone and ready to turn? This week, it seems the drop has stalled and prices have consolidated. We do have a technical signal of possible hidden bullish divergence as we can see higher lows in the price and lower lows in the oscillator. Will the longer term trend resume higher?
There are still concerns and uncertainty in the US financial markets and another bank blowup could return favor back to the higher yielding Aussie very quickly.
After breaking upper resistance in the beginning of August, the Greenback’s rally against the Loonie has finally turned after hitting highs around 1.07. The Loonie has rallied in the last week or so as it seems crude oil hit a temporary bottom above $110 and then found a bid to push it up back above $120. The crude oil trade may remain very volatile for now as we see concerns shift between supply and demand, seasonal storms, and geopolitical risks.
If the market does take the pair back to the broken resistance area, will we see traders jump in to push the Greenback higher? I think so as global concern has been moving from a weak US economy to global economic weakness. Of course, uncertainty and a spike in oil prices could hurt the US Dollar really quick. Gotta stay on your toes!
After the strong US Dollar rally over the past month, the Kiwi found buyers waiting at the previous support area around .6800 (which also lines up with the the 61% Fibonacci retracement area). Is this a return to the longer term rally higher? Stochastics are indicating conditions may be oversold, so there is a possibility we may see further pull back higher on profit taking and a return to higher yields. We’ll just have to wait and see, but a break above this week’s highs should be a catalyst for the Kiwi to roll higher.
Well, that’s it for now. Look for trade ideas next week as the market unfolds. Good luck and have a great weekend!