Currencies AUD, NZD, CAD are called “commodity currencies”. The name is not a coincidence – these are currencies of countries, whose main export components are raw materials.
- rising iron ore prices favourable for AUD
- inverted Head and Shoulders suggests an upward correction
- live trading session today at 13:00 GMT
Most commodity prices have skyrocketed in recent months. As an example, let’s take the chart of iron ore prices – since the beginning of December the price has increased by 50%! Iron ore is Australia’s main export product – it accounts for 25% of all exports. It is not hard to guess that such a situation on the raw materials market suggests strengthening of the Australian dollar.
Inverted H&S on AUDCAD
Looking at the AUDCAD chart we can see that after the nearly year-long downtrend, during which the price of AUDCAD fell by 1100p, a signal appeared, if not for the reversal of the trend, then at least for an upward correction. This signal is an inverted Head and Shoulders pattern well visible on the H4 chart.
On the H4 chart we can see that the price has overcome the neckline and after its re-test, which occurred overnight, the price is travelling north.
The nearest S/R level is 0.916 and if it is overcome, which is very likely, the next demand target is the 0.9220 supply zone.
The above analysis is based on the PA+MACD strategy, a detailed description of which you can read HERE . I will talk more about the PA+MACD strategy applied to these currency pairs during the live trading sessions which you can attend from Monday to Friday.
More current analysis on the group : Trade with Dargo
I invite you to my – Friday, 11th of February at 13:00-14:00 GMT– live trading session here: https://www.xm.com/live-player/basic
In our Facebook group, which you can join anytime: https://www.facebook.com/groups/328412937935363/ you will find 5 simple strategies on which my trading is based. There, every day we post fresh analyses of currency pairs and commodities. You can also visit my channel where I post my trading ideas: https://t.me/TradewithDargo
