Another squeamish graphic from FinViz: Note how, amid the actively traded currencies, the marketplace position recovery has been led yesteryear New Zealand together with Commonwealth of Australia vs. the U.S. dollar (top chart). The currencies of the resources producing countries, every bit a whole, accept fared ameliorate than those of the resources consumers; countries nigh affected yesteryear economical crisis together with ascent debt levels accept too seen their currencies lag.
But it turns out that AUD/USD is non a bad proxy for opportunity appetite inwards the recent market. If you lot depository fiscal establishment annotation the 2d nautical chart from the bottom, you'll encounter that AUD dropped precipitously during the marketplace position crisis, every bit investors sought the security haven of USD. While stocks made their bottom inwards March, AUD held its slow 2008 lows together with proceeded higher, amongst peaks about corresponding to those inwards stocks: a relatively apartment corrective catamenia into early on July, a force to novel highs, together with nigh latterly rangebound trade.
Which is why, when I saw stocks (ES futures; 2d nautical chart from top) intermission below their multiday attain this morning, I was especially interested to encounter a smart snapback rally inwards AUD/USD (third nautical chart from top). Influenza A virus subtype H5N1 five-minute nautical chart that's a piffling broader (bottom chart) shows that AUD/USD genuinely moved nicely inwards a higher house yesterday's highs.
These are the kinds of piffling tells I await for inwards handicapping whether opportunity assets volition last coming dorsum into favor vs. rolling over. I idea the snapback inwards stocks, led yesteryear currency snapbacks vs. USD, was a indicate inwards favor of the equity bulls.
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