In the commodity-currency correlation department, commodity bulls know that a strong Australian Dollar is a tailwind for commodities.
Today, we look at both – The Equal Weight Commodity Index and the Australian Dollar Currency – on “monthly” timeframes.
And we turn to Joe Friday to report, “The facts, Ma’am. Just the facts.”
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 at the same time. What happens here will send a very important message to currencies and commodities! Stay tuned!!
Commodity Index versus $Australian Dollar Comparison Chart
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