A new high for the Aussie?

By Erik Tatje

Australian Dollar (CME:ADM14)

The Aussie Dollar has been trending higher since late January and the currency appears to be on the verge of a new leg higher. Price broke above a previous high during yesterday’s session and the level that was previous resistance at 9069 has now become support for price. Both near term momentum as well as the intermediate term directional bias in this market remain positive and the highest probability opportunity appears to be on the long side of the Aussie. Continue to use the 9069 pivot as support going forward. Ideally, price should remain above this support pivot; however, in the event of a more significant pullback in the price of the Aussie, look to the 9009 – 9000 area to be the next zone of support. Until price breaks below the 8955 low on the chart, the directional bias will remain positive, and buying corrective pullbacks into support will remain a plausible strategy to implement in the Aussie Dollar.

Australian Dollar, 30-minute Bar Chart, eSignal

Natural Gas (NYMEX:NGJ14)

Natural Gas continues to look weak as price broke below the 4300 level yesterday before eventually finding support at the 4265 suppot pivot on the chart.  Price has has a bit of a corrective bounce off this level in the early mornign session; however, sentiment in this market remains bearish.  Look for the recent corrective rally to lose steam around the 4335 area on the chart. In the event that price is able to push above this level, the 4375 – 4382 resistance band is the next valid upside target. The directional bias in this market is lower and selling corrective rallies into resistance is a valid strategy to implement until price proves otherwise. Keep in mind that Natural Gas is in the process of rolling over from April to the May contract so look for volume in the April contract to dissipate as the week progresses.

Natural Gas 30-minute Bar Chart, eSignal

Cotton (NYBOT:CTK14)

Despite yesterday’s big sell-off in the Cotton market, the technical framework of price action in this market remains firm. Prices have been trending higher nicely for the past few months and the recent corrective pullback could present a valid opportunity for those bullish on Cotton prices to enter the market from a better price. The area from 90.41 – 90.83 appears to be a solid zone of support from which price seems to be respecting at the current time. Any further weakness in price would be expected to find support around 89.20 – 89.60 on the chart. The intermediate term higher high higher low structure will remain valid until a break below the low at 86.12. Although near-term momentum may be unclear, the longer term directional bias remains positive in the Cotton market.  The RSI showed an extremely oversold signal following yesterday’s big move, which is to be anticipated after a large sell-off. The question now for traders will be whether or not yesterday’s price active was merely a corrective pullback or the start of something bigger.

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