Australian Dollar Establishes a Bull FlagPosted 11/08/2019 8:43AM CT |
U.S. dollar futures punched higher Friday morning, breaking psychological resistance at the 98 level. This week’s sharp move to the upside is no surprise considering the prospect for a phase one trade deal and new all-time highs in U.S. stock indices. To add fuel to the fire, U.S. interest rates are climbing higher, attracting foreign investment to the U.S. economy and helping to support the greenback. Expect resistance at 98.25, then again at 98.46. A close over that level could prompt buying back over the 99 level. Foreign currencies are selling off on dollar strength, specifically the euro and the pound. The chart set-up on the Japanese yen looks ugly, but I do believe there is value at these levels. This is a safe-haven currency, so it is selling off as sentiment improves. Commodity currencies, like the Canadian and Australian dollar, are relatively stronger. The Royal Bank of Australia did not cut rates at their meeting this week, which is helping to support the Aussie dollar. Technically speaking, the Dec AUD is forming a bull flag on the daily chart as the market takes a breath and is attempting to reverse the downtrend. I have a bullish bias on the Australian dollar so long as it remains above 68.25.