Tag Archives: Copper

Copper Breakdown Suggests a Lower AUD/USD Rate

One of the stronger correlations (over time) between currencies and commodities is the strong Australia Dollar and Copper correlation:

11-28-14AUDHG

 

Today, copper made a significant surge lower breaking key technical support at 2.88. At minimum, copper looks set to test the 2.50 (Fibo) support:

11-28-14HGweekly

 

If you take a good look at the AUD/USD weekly chart, it looks set to test below .8000:

11-28-14AUDWeekly

 

For the last couple years I have been looking forward to getting on the long side of the AUD/USD below .8000, and it looks like this time it could actually happen. However, one has to wonder….If the Dr. (Copper) has a PHD in economics, what is this current move suggesting? Some would think that the good doctor has either failed a few classes on the way to getting the PHD or royally screwed up his/her dissertation. But with China continuing sluggish growth (relatively speaking) and global deflationary pressures mounting, perhaps we should pay a little closer attention to what the doctor is telling us.

 

Blake Morrow

Chief Currency Strategist, Wizetrade

Follow me on Twitter @pipczar

 

Disclaimer: I am short the AUD/USD from 2+ weeks ago.