The Australian Dollar Appears Oversold
This week’s Federal Reserve meeting could ignite some activity in the currency market. The Australian Dollar, in particular, has some interesting patterns.
First, stochastics on AUDUSD’s weekly chart have dipped to their most oversold level since February 2020. Next, consider how prices have returned to the 0.73 area where they peaked Aug. 31-Sept. 1. This is also near a monthly low from May 2017.
Intermarket analysis could be interesting because the Aussie has traditionally followed copper (although that correlation has broken down this year). Given the current rally in copper and ongoing strength in iron ore, this could support the currency. Remember, Australia is a major mining country.
Overall, there isn’t much confirmation yet and the Australian economy is still struggling. However, given the Fed’s commitment to low rates and potential topping patterns in the greenback, futures traders may want to keep an eye on the Aussie for a potential turn.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
First, stochastics on AUDUSD’s weekly chart have dipped to their most oversold level since February 2020. Next, consider how prices have returned to the 0.73 area where they peaked Aug. 31-Sept. 1. This is also near a monthly low from May 2017.
Intermarket analysis could be interesting because the Aussie has traditionally followed copper (although that correlation has broken down this year). Given the current rally in copper and ongoing strength in iron ore, this could support the currency. Remember, Australia is a major mining country.
Overall, there isn’t much confirmation yet and the Australian economy is still struggling. However, given the Fed’s commitment to low rates and potential topping patterns in the greenback, futures traders may want to keep an eye on the Aussie for a potential turn.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
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