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Commodities Face 14-Year Breakout Test

ByChris Kimble
Published 04/29/2022, 10:04 AM
Updated 07/09/2023, 06:31 AM

In the commodity-currency correlation department, commodity bulls know that a strong Australian dollar is a tailwind for commodities.

Today, we look at the Equal Weight Commodity Index and the Australian Dollar Currency on monthly timeframes. Equal Weight Commodity Index, Australian Dollar Monthly Charts

As you can see, both the commodity index (upper pain) and Aussie Dollar (lower pain) are trading in long-term falling channels. Both have shown strength over the past two years, with commodities exploding higher!

And now, these highly correlated assets are each testing upper channel breakout resistance simultaneously.

Latest comments

gold is high, iron is still high
He is saying sell both
Wish market crashes and bankrupt
I see the 2003 BO of 200's set resistance top had retested with the Covid drop before this break neck rally to top of channel. What strikes me most and made me bearish on AU for example .8, is that the BO retests never set a liquid bottom enough to support a BO from long standing downtrend. .6 remains that untested area and the structure on EWCI 160-180 is also the same. Those I believe hold the orders that make a BO possible, but at this point, the lack of balanced liquidity behind this 2 year rally is what makes me believe EWCI will retest that 160-180 zone, and AU's .6 zone. Then we can see that BO for .95 and eventually 1.05 Monthly resistance that never retested before falling to .55 with Covid. I can't wait for this retirement move to start.
"2003 BO of 2000's set resistance top" typo
interesting 👍
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