Tom Scollon

At first glance you would maybe think that the Aussie is heading south – looking at a daily. But further analysis of a weekly chart reveals it is really only range trading.

But for futures traders this extent of movement in a daily is heaven. Plenty of volatility but with a reasonably defined direction.

Let’s look at the charts – daily and weekly:


Australia$/US$ (FXADUS) : Daily Line Chart

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Australia$/US$ (FXADUS) : Weekly Line Chart

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So, in the daily we see plenty of movement with a rise to maybe 77/78 cents and then a low to 72/73.

A perfect storm.

The weekly is plain vanilla. Drifting sideways. Also, good news for short term traders – a market that is relatively easier to understand the rationality of what is happening.

The monthly is more of a conundrum:

Australia$/US$ (FXADUS) :  Monthly Line Chart

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No need for panic stations as this is going to play out over a longer time frame of a couple of years and there will be plenty of opportunities to analyse at leisure in the coming months.

The projected 2020 60 cents low may be good for exporters, but it could leave a few travellers lamenting not planning their purchase of Aussie dollars sooner. Consumers have little choice. They must cop increases in most items they buy.

For authorities this could be the perfect storm they have been waiting for – some degree of inflation.

2020? Just keep partying. Any thing can happen between now and then.

Enjoy the ride

Tom Scollon