As a companion blog to this post from earlier, let us now turn to the Aussie after looking at the Euro.
Just as with the Euro, a strong Aussie versus the Dollar and Yen tends to bode well for global risk appetite, whereas a strong Yen and Dollar are often signs of “risk off.” Again, American futures and Japan markets are closed this evening.
Looking at the Aussie/Yen first chart below, the weekly timeframe indicates a strong breakout above the key 88 level. Perhaps it is a bit overheated for now, but as long as this breakout holds true it opens up some interesting opportunities, including likely higher prices for stocks in Japan.
The Aussie/Dollar weekly is the second chart below. Note the symmetrical triangle nearing resolution with Bollinger Bands starting to pinch in. I would key off this chart in the coming weeks as yet another major piece of the puzzle to see where global risk appetite goes from here, with 1.06 looking to be the upside trigger.
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