Commodities point to weaker Aussie and Canadian Dollar

CRB Commodities Index is testing support at 300 and the lower border of its trend channel. 63-day Twiggs Momentum holding below zero indicates a strong primary down-trend. Breakout below the trend channel would warn of a sharp decline, with a target of 260*. Respect is less likely, but would indicate a rally to test the upper trend channel.

CRB Commodities Index

* Target calculation: 300 – ( 340 – 300 ) = 260

Canada’s Loonie and the Aussie Dollar are both closely linked to commodity prices. A fall in the CRB index would lead to similar falls in the two currencies. CAD breakout below $0.9650 would signal a test of $0.94*.


* Target calculation: 1.00 – ( 1.06 – 1.00 ) = 0.94

Both currencies commenced a primary down-trend when they broke parity. An Aussie Dollar breakout below $0.97 would offer an identical target of $0.94*.


* Target calculation: 1.02 – ( 1.10 – 1.02 ) = 0.94

Loonie turns, will Aussie follow?

Canada’s Loonie broke parity against the greenback, confirming a primary down-trend and offering an initial target of $0.94*.


* Target calculation: 1.00 – ( 1.06 – 1.00 ) = 0.94

The Canadian and Aussie Dollars have tracked each other closely over the last year and it seems inevitable that the Aussie will follow the Loonie below parity.


Loonie band

The Candian Loonie is consolidating in a narrow band above parity, warning of selling pressure. Earlier penetration of the long-term rising trendline indicates the up-trend has weakened. Breach of support would confirm a primary down-trend, with an initial target of $0.94 against the greenback.

Canada Loonie CADUSD

* Target calculation: 1.00 – ( 1.06 – 1.00 ) = 0.94