Forex Strategist
Try our brand new weekly, six page Forex report. Discover why Pros are loving it!
Following the analysis of the leading ability of AUD/NZD on Oil prices, there have been some events in the last few weeks that are worth noting. AUD/NZD tried breaking downward the bullish trend line in place since 2009, but for now this seems to be a false signal, considering the rapid and violent rise of the cross above 1.2580.
While the exchange ratio of this movement could be an important sign of relative strength for the Aussie on the Kiwi, the matter about the oil it is very interesting.
From 2009 onwards, this model has never missed a shot; AUD NZD has always anticipated the top and low of the WTI two months in advance (except in the case of 2010 in which, however, there has been an advance of one month).
If we consider as reliable the primary low of AUDNZD on October the 5th, we know that, with high probability, the oil around December the 5th will set a primary bottom before an upward restart. In case the prices of the WTI should fall near the 2011-2012 support of $ 78, then the purchase of crude oil would be an obvious choice with a very limited risk (Chart source: Bloomberg).
While the exchange ratio of this movement could be an important sign of relative strength for the Aussie on the Kiwi, the matter about the oil it is very interesting.
From 2009 onwards, this model has never missed a shot; AUD NZD has always anticipated the top and low of the WTI two months in advance (except in the case of 2010 in which, however, there has been an advance of one month).
If we consider as reliable the primary low of AUDNZD on October the 5th, we know that, with high probability, the oil around December the 5th will set a primary bottom before an upward restart. In case the prices of the WTI should fall near the 2011-2012 support of $ 78, then the purchase of crude oil would be an obvious choice with a very limited risk (Chart source: Bloomberg).
