Hey guys, This chart is showing a thesis I have on considerable strength coming into the AUD over the next 2 years and this seems to be a great setup for a long hold. The Linked image is a 1 hour timeframe charts showing beautiful lighting bolt pattern that blast past resistance making a good entry with a tight stop loss. This will lost likely rally into Christmas to the 4% target outlined. The main chart tho is my macro look at this pair and there a multiple factors driving this. First lets look at the past with inflation, in the 70s when the fed was behind on getting ontop of inflation the USD weaken driving commodities and other currencies up. Also after recessions and crisis the USD seems to lag anyway just think to 2010-2011 where we made All Time Highs above $1 this would suit nicely to the rally starting now. Also technically we have a massive head and shoulders pattern with the head to neckline distance being the same distance from neck to the highs above $1 which if unfolds would make a cup pattern. Short term gains are also backed by the Silver reversal we Sore yesterday, the Aud is highly corelated to Silver price as its more a play on USD weakness. So if you overlay the two you will see when Silver bulls so does the AUD.
In conclusion this could be a great time to buy as you can have tight stop loss with an easy 4% gain before Christmas but could play into a much bigger rally over the next two years.
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