Over the past 11 years, the Australian dollar (AUD) has been on a downtrend. Today’s chart highlights its falling channel marked by each (1).
Could we be nearing a change in trend?
Everything changed after the COVID bottom in 2022. Since then, the Australian dollar has been in rally mode. And when AUD is strong, it usually means commodities are strong.
The rally carried AUD up to the top of its falling channel (resistance), and it has been bumping up against it for several months. The month of March has been bullish and has the Australian dollar back knocking on breakout resistance at (2).
If the AUD breaks out at (2), commodities should scream higher!
However, if the Aussie starts declining at (2), odds increase that the rally in commodities has peaked.
