“Aussie Dollar (AUD/USD) strength has accompanied the latest rally in commodities. But it is facing a stiff test right now. As you can see, it is at dual resistance. A cluster of resistance is in play here and the AUD/USD may have made a reversal pattern, poking up through resistance and reversing below it – watch for a break of that support,” according to See It Market.
Equity ETFs are responding to the higher Aussie, meaning these funds could be vulnerable if the currency pulls back.
The SPDR MSCI Australia Quality Mix ETF (NYSEArca: QAUS) emphasizes the quality factor, which captures excess returns to stocks that are characterized by low debt, stable earnings growth and other ‘quality’ metrics. Lastly, the First Trust Australia AlphaDEX Fund (NYSEArca: FAUS) selects Australian companies based on growth factors including 3-, 6- and 12-month price appreciation, sales to price and one year sales growth, along with value factors including book value to price, cash flow to price and return on assets.
“What the Aussie Dollar does from here could well go a LONG way to determining if commodities like Crude Oil and Gold are topping out or ready to breakout,” adds See It Market.
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CurrencyShares Australian Dollar Trust
